Fed’s Evans says decision on taper will be tough at December meeting

City A.M. Reporter
IT WILL be “tough” for the Federal Reserve to have sufficient confidence in the strength of the US recovery by its meeting in December to start scaling back its massive bond-buying campaign, one of its senior officials said yesterday.

“October is a tough one. December? I think we need a couple of good labour reports and evidence of increasing growth, GDP growth. It is probably going to take a few months to sort that one out,” Chicago Federal Reserve president Charles Evans told CNBC television in an interview.

The Fed is buying $85bn in Treasuries and mortgage-backed securities every month to keep interest rates low and stimulate economic recovery in the US.

Fed officials hold their next policy meetings later this month and then in December. Evans, one of the 19-member policy-setting committee’s most dovish members, is a voter this year.

“It is very difficult to feel confident in December given that we’re going to repeat part of what just took place in Washington,” Evans said.