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During an interview on Monday, Fisher – who is also the Dallas Federal Reserve Bank President – said that he supported Fed Chief Janet Yellen’s measured tapering of the now $65-billion bond-buying fund which was established in 2009.
During her first meeting as Fed chief with House Financial Services Committee in Congress on February 12, Yellen said: “I served on the committee as we formulated our current policy strategy, and I strongly support that strategy”.
Although she acknowledged that economic recovery is “far from complete,” Yellen said that the pickup in economic activity has fueled further progress in the labour market, which justified the Fed’s latest tapering moves.
US unemployment rates have fallen from more than eight per cent last year to 6.6 per cent in January 2014, but Yellen says even that is too high.
The Fed will continue to hold interest rates near the zero mark until the unemployment rate falls below 6.5 per cent.
The Fed’s tapering initiative appears to have also won accolades among economy analysts. A National Association of Business Economics survey found 70 per cent of market experts supported the Fed’s taper.
Fifty-eight per cent of economists surveyed indicated they expected Fed officials to cut by another $10 billion the current fund until it is completely phased out by the end of the year.
Meanwhile, US stocks edged upwards, cutting into some of their overall decline so far in 2014.
The S&P and Dow Jones both climbed up 1.1 per cent while the Nasdaq went up 1 per cent.