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Fed to Trim QE This Summer?




The Federal Reserve might start reducing monthly QE from 85 billion already this summer, in 2013.

According to the article, the Fed will continue the quantitative easing program until "substantial" improvement is seen in the labor market.

A quote by John Williams, president of the Federal Reserve Bank of San Francisco: "If all goes as hoped, we could end the purchase program sometime late this year" indicating a possible reduction of the monthly QE in the second half of this year. The Fed might "ease the easing" as soon as this summer or, later this year.

John Williams forecast a growth rate for the US economy of 2.5 % in 2013 and he expects it to pick up to a 3.25 % rate in 2014.

Williams expects this growth to contribute to the diminishing of the unemployment rate, which could fall below 7 %.

St. Louis Fed Bank President, James Bullard favors a 10-15 billion dollar trimming of the QE.

Earlier, Prime Values reported on the QE pace slowing issue - according to the respective Bloomberg source article, the pace-slowing could reach 40 billion dollars monthly.





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