Fed has not discussed when to end QE, Bullard says:
Washington (Mar 26) Federal Reserve policymakers have not discussed the exact timing for wrapping up their bond-buying stimulus, a top Fed official said on Wednesday in comments that suggested quantitative easing could end any time from October to January.
"There's a little bit of ambiguity around the notion of when the QE program ends, because what does that mean: does that mean October, does that mean December, does that mean January?" St. Louis Federal Reserve Bank President James Bullard said in an interview with Bloomberg Television. "Frankly, the committee has not really talked about that."
Since 2008, the Fed has kept short-term interest rates near zero and bought more than $3 trillion in bonds to push down long-term borrowing costs and spur jobs growth.
With unemployment falling faster than expected, the Fed is now on a path to wind down its bond-buying program in "measured steps" and last week trimmed its monthly purchases by $10 billion, to $55 billion.
Philadelphia Fed President Charles Plosser said Tuesday that the program will probably be completely wound down by November, or perhaps October.
Investors are focused on when the Fed will complete its bond-buying program because the U.S. central bank has promised to keep short-rates near zero for a "considerable time" afterwards.
Pressed on the statement at a news conference afterward, Fed Chairman Janet Yellen said the phrase "probably means something on the order of around six months or that type of thing." Stocks and bonds immediately tumbled as traders took the statement to suggest rate hikes could come sooner than they had anticipated.
"I want to stress this is not a calendar-based policy, it's a data-based policy," Bullard told Bloomberg Television.