The jobs report on Friday
was disappointing, which makes people questioned whether the economy lives up
to the forecast, yet Federal Reserve officials will continue to reduce
bond-buying. In January, the purchase amount was lowered to $65 billion and
officials want to cut it to $55 billion at their next meeting in March.
Fed Chairwoman Janet
Yellen will have to explain these contradictory signals next week, when she
testifies before Congress on the outlook for the economy and monetary policy.
Regarding the bond-buying program, Mr. Rosengren said: "We should be
fairly slow moving until we get a better assessment of the economy's
performance.”
Another challenge facing
Ms. Yellen is to explain how the unemployment rate and expected short-term
interest rates. The Fed has said it wouldn't consider raising rates until the
unemployment rate declined to 6.5%, but the unemployment rate has fallen much
faster than officials expected over the past year. Many officials believe the
Fed can still keep rates low because inflation is well below target.
I agree with Fed sticking
to its policies. According to the article, he job report on January could be
affected by the harsh weather. As November and December are holiday season, the
job reports for these months can inflated due to the growth of retailer sales.
Thus, we could not expect January to do as well. Overall, the economy is still
growing and head to the right direction, and lower bond-buying by nearly 15% is
still bond-buying.
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