According to nationalmortgagenews, a survey of economists by Bloomberg reports Federal Reserve Chairman Ben Bernanke is expected to reduce the quantitative easing that has been used to bolster the economy from $85 billion monthly to $50 billion by year’s end. That would be followed by a second cut to $30 billion next year and then an end to bond buying altogether, providing interest rates do not suddenly shoot up. Former Fed economist Joseph LaVorgna, noting the accommodation withdrawal is unprecedented territory, says, “You want to see how the market is going to digest a cut in purchases so you want to do it in a way that minimizes the disruption.” The Fed started purchasing $40 billion a month of mortgage-backed securities is Sept., 2012 and then increased it by $45 billion in Dec. Sixty-one percent of the 47 economists in the survey say they expect the bond-buying to end in the first half of 2014. As MHProNews has learned after its last meeting March 20, the Fed pledged to keep buying securities until there is substantial improvement in the job market.
