Tags: Fed | bond | buying | Treasurys

Dealers Saw Fed Bond Buying Cut to $70 Billion in September

Thursday, 22 Aug 2013 03:25 PM

Primary dealers expected the Federal Reserve to reduce the pace of its asset purchases in September by $15 billion, to $70 billion a month, a July survey showed.

The median forecast in the survey by the Federal Reserve Bank of New York saw the central bank buying $35 billion of Treasurys and $35 billion of mortgage-backed securities next month, according to the survey conducted before the Federal Open Market Committee’s July 30-31 meeting. The FOMC’s next meeting is scheduled for Sept. 17-18.

Fed officials last month affirmed their plan to keep buying $45 billion in Treasurys and $40 billion in mortgage bonds per month in an effort to bring down joblessness of 7.4 percent. Fed officials were “broadly comfortable” with Chairman Ben S. Bernanke’s plan to taper this year if the economy strengthens, minutes of the July meeting released yesterday showed.

Bond dealers expected the $70 billion pace to continue until December, when monthly Treasury buying would be lowered to $30 billion and mortgage purchases cut to $25 billion, according to the survey. The Fed’s third round of quantitative easing will be completed in June, the dealers predicted.

The Fed’s primary dealers trade government securities with the central bank and are obligated to bid in Treasury auctions.

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Primary dealers expected the Federal Reserve to reduce the pace of its asset purchases in September by $15 billion, to $70 billion a month, a July survey showed.
Fed,bond,buying,Treasurys
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2013-25-22
Thursday, 22 Aug 2013 03:25 PM
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