Fed’s Latest Round Of Bond Buying To Reach $1.14 Trillion By 2014

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Source: Bernanke Seen Buying $1.14 Trillion in Assets in 2014

Notable Excerpts:

Federal Reserve Chairman Ben S. Bernanke’s latest round of bond buying will reach $1.14 trillion before he ends the program in the first quarter of 2014, according to median estimates in a Bloomberg survey of economists.

Bernanke has said the policy will continue until there are “substantial” gains in employment.

In the first round of purchases, begun in 2008, the Fed bought $1.4 trillion of housing debt and $300 billion of Treasuries. In the second round, beginning in November 2010, the Fed bought $600 billion of Treasuries.

In the current round, the Fed’s total purchases will be split between $600 billion of mortgage-backed securities and $540 billion of Treasuries, according to the median estimates of economists in the survey.

Asked what would prompt the Fed to halt its bond buying, 63 percent of economists said the central bank will act in response to substantial improvement in the labor market. Only 13 percent said the Fed will end its purchases because of accelerating inflation or a rise in inflation expectations.

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