The Federal Reserve today declined to curtail its economic stimulus program, surprising investors who had expected the government’s bond-buying to be tapered off starting this month.
Investors anticipated that the policy statement at the end of the two-day Federal Open Market Committe meeting today would lead to a “tapering” announcement of the Federal Reserve’s $85 billion a month bond purchase program. The question was how much the Federal Reserve would scale back its purchases. Many investors on Wall Street expected the Federal Reserve to cut its purchases by about $10 billion to $15 billion. Instead, it did nothing. Stocks moved sharply higher on the news.