As many expected, the Federal Reserve has decided to taper another $10 billion from its monthly bond-buying program. Wednesday’s decision follows the $10 billion reduction from last month and drops asset purchases down to $65 billion per month.
Amid recent economic data, the Fed chose to continue their plan to exit monthly purchasing that initially stood at $85 billion. The first moderate pullback on Dec. 18 was kickstarted due to slight growth in the economy, a drop in unemployment rates and an increase in household spending.
Even though economic data has recently taken a hit with a weaker job report and payroll numbers in December, the Fed notes that activity in recent quarters “had picked up” and the economy’s outlook is still fairly bright.
There was no statement made on the current issues in the global financial markets, such as South Africa and Turkey, where interest rates have risen and their currencies have weakened. Interest rates in the U.S. are expected to remain low.
Gold spiked following Wednesday’s meeting and now sits at $1,267.00 at time of writing. Silver and platinum have also benefitted on the day and are up 12 cents and $3, respectively.
In other news, Janet Yellen takes over as Fed Chairman next month as Ben Bernanke is stepping down after eight years in the position. Her policies are closely related to his.
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