(WASHINGTON) — The Federal Reserve on Wednesday announced cuts of $10 billion to its monthly bond buying program, citing belief in job market improvement.
The reduction, which marks the fourth time such cuts will be implemented, will bring purchases down to $45 billion. Along with the announcement, the Fed reaffirmed its plan to keep short-term interest rates low.
Low interest rates would keep the economy growing, according to Bankrate’s chief financial analyst Greg McBride.
“The Fed still views inflation as too low and unemployment as too high, and until both of those situations change, the Fed’s not going to be inclined to raise short-term interest rates,” McBride said. “So consumers and businesses can continue to enjoy this period of record-low interest rates, particularly when it comes to borrowing.”
Now that brutal winter weather is giving way to warmer temperatures, officials are hopeful the economy will start picking up. While recovery in the housing sector remained slow, household spending appears to be rising more quickly.
Copyright 2014 ABC News Radio
John Newsome and Anne Woolsey, CNN