By The Associated Press
Fed suggests it's closer to slowing bond purchases
WASHINGTON (AP) â¿¿ Chairman Ben Bernanke ended weeks of speculation Wednesday by saying the Federal Reserve will likely slow its bond-buying program later this year and end it next year if the economy continues to improve.The Fed's bond purchases have helped keep long-term interest rates at record lows. A pullback in the Fed's purchases would likely lead to higher rates on mortgages and other consumer and business loans. Bernanke said the reductions would occur in "measured steps" and that the purchases could end by the middle of next year. By then, he said he thought unemployment would be around 7 percent. ___ Stocks slide as Fed says bond purchases could slow NEW YORK (AP) â¿¿ Financial markets shuddered Wednesday after the Federal Reserve said it could start scaling back its huge economic stimulus program later this year and end it by the middle of 2014. The reaction by investors -- the Dow Jones industrial average fell more than 200 points and the yield on the 10-year Treasury note rose to its highest in 15 months -- showed just how much investors have come to depend on the Fed's easy money policies that have helped send the stock market up 141 percent in the past four years. The selloff was broad. All 10 sectors in the Standard's & Poor's 500 were down. The Fed's $85 billion in monthly bond purchases have helped the U.S. economy by keeping long-term interest rates low and encouraging borrowing and investing. Now, it looks like the Fed is closer to ending that program as the U.S. economy improves. ___ Government report: Smooth launch unsure for health law WASHINGTON (AP) â¿¿ There's no guarantee that President Barack Obama's health care law will launch smoothly and on time, congressional investigators say in the first in-depth independent look at its progress.