The Federal Reserve’s Federal Open Market Committee announced Wednesday that it would continue its “taper” of it’s bond-buying stimulus program, reducing monthly purchases of U.S. government debt and mortgage bonds from $75 billion per month to $65 billion per month.
The decision came despite a surprisingly weak jobs report released earlier this month, which estimated that the U.S. economy added just 74,000 jobs in December, and speculation of late that a pull back in Fed stimulus was helping to foment volatility in emerging markets like Argentina and Turkey.
“Information received since the Federal Open Market Committee met in December indicates that growth in economic activity picked up in recent quarters,” the FOMC said in a statement. “Labor market indicators were mixed but on balance showed further improvement.”
Stocks declined sharply following the Fed’s decision.
The announcement followed a two-day meeting of the FOMC, and the final meeting over which Ben Bernanke would serve as chair. Janet Yellen will assume the role of Fed chair beginning Saturday, Feb 1st.