Two senior Federal Reserve officials sought to quash perceptions the US central bank is moving quickly towards reeling in support for the economy and delivered a dig at investors for being “out of sync” with Fed thinking.
The remarks are the clearest attempt by officials to clarify Fed monetary policy after Ben Bernanke, Fed chairman, last week rattled the markets by proposing a timeline for trimming its $85bn bond-buying programme this year.
Bill Dudley, president of the Federal Reserve Bank of New York, reiterated the path set out by Mr Bernanke, which included ending the asset purchases by mid-2014, but he qualified it significantly, saying “a few points” deserved to be emphasised. The first was that such a policy was just “one possible outcome” and depended on “the outlook rather than the calendar” – meaning the economy would have to improve in line with Fed forecasts.