This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Fed Member: Bond Buys Likely To Slow Later In Year

By MARTIN CRUTSINGER

WASHINGTON (AP) â¿¿ A Federal Reserve voting member said Tuesday the central bank is "quite likely" to start reducing its bond purchases later this year but that any change hinges on the economy showing improvement.

Charles Evans, president of the Fed's Chicago regional bank, held off saying which month the Fed could begin to scale back its $85 billion a month in bond purchases. But he did not rule out the Fed's next meeting on Sept. 17-18, during an interview with reporters.

"Our adjustment to asset purchases will be conditional on our outlook materializing," Evans said. "We are not on a pre-set course."

The bond purchases have kept long-term interest rates low, encouraging more borrowing and spending.

Evans said the purchases could be slowed stages and that the program could end by the middle of next year, if unemployment falls to around 7 percent. His remarks were in line with previous comments made by Fed Chairman Ben Bernanke.

The unemployment rate fell in July to 7.4 percent, down from 7.6 percent in June. The economy has been adding jobs at a steady but inconsistent pace this year. In July, employers added 162,000 jobs. While solid, that's much slower than the average pace of 192,000 new jobs a month added so far this year. And many of the jobs added last month were low-paying or part-time.

The economy grew at a sluggish annual rate of 1.4 percent in the first half of the year. But Evans forecasts that overall economic growth could accelerate to an annual rate of around 2.5 percent in the second half of this year.

And stronger trade report released Tuesday has private economists predicting that growth in the April-June quarter could be revised up sharply from the 1.7 percent annual pace reported last week.

Even if the bond program ends next year, Evans said the Fed will likely have purchased at least $1.2 trillion in mortgage and Treasury bonds since September 2012. Evans said the program has been "quite successful," countering critics who charge that it has done little to boost economic growth.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs