Fed Plans To End Asset Purchase Program In October

(RTTNews) - The Federal Reserve plans to completely unwind its asset purchase plan in October as long the economy continues to pick up, the minutes of its June meeting reveled Wednesday.

The Federal Open Market Committee has reduced bond purchases by $10 billion at each meeting since December, and will end by cutting $15 billion in October.

"Participants generally agreed that if incoming information continued to support its expectation of improvement in labor market conditions and a return of inflation toward its longer-run objective, it would be appropriate to complete asset purchases with a $15 billion reduction in the pace of purchases in order to avoid having the small, remaining level of purchases receive undue focus among investors," the minutes stated.

"If the economy progresses about as the Committee expects, warranting reductions in the pace of purchases at each upcoming meeting, this final reduction would occur following the October meeting."

Officials said they would release a more detailed exit plan from unprecedented stimulus later this year.

The minutes offered few signals about when the Fed might potentially begin tightening interest rates from near zero.

The meeting took place well before the government's employment report for June, a potential game-changer which showed the jobless rate fell to an almost six-year low of 6.1 percent in June as payrolls grew 288,000.