Federal Reserve Chairman Ben Bernanke said yesterday that the Fed could still decide to begin cutting its stimulus programme later this year.
Speaking after the Fed surprised markets by keeping the $ 85 billion a month asset-purchase programme unchanged, Bernanke said “we could move later this year” if the economy keeps growing and Fed policy makers have more confidence in their outlook.
“There is no fixed calendar,” Bernanke told reporters in a news conference after a two-day policy meeting of the Federal Open Market Committee (FOMC).
“If the data confirm our basic outlook, if we gain more confidence in that outlook... then we could move later this year,” he said.
“But even if we do that, the subsequent steps will be dependent on continued progress in the economy. So we are tied to the data.”
Analysts had widely expected the FOMC to make its first reductions to the $ 85 billion a month bond-purchase programme at yesterday’s meeting, a move that might have confirmed views that the economy was picking up strength.
But Bernanke said the FOMC members were still wary of the impacts of a four-month spike in interest rates and ongoing Government spending cuts on growth.