Federal Reserve policymakers signalled the central bank will complete the job of reducing its multitrillion-dollar balance sheet this year, in a boost to financial markets that have in recent months been unnerved by the process.
Minutes to the Fed’s latest policy meeting in January showed almost all the participants wanted to announce a plan soon for ending the reduction of asset holdings “later this year”, as they pledged to provide more certainty to markets about the final stages of the programme.
The decision came in a meeting at which the Fed kept US interest rates steady at 2.25-2.5 per cent. Officials agreed during the meeting that holding rates for a time posed “few risks”, with several saying further increases would only be necessary if inflation accelerated more than they expected.