The US Federal Reserve needs better way to signal policy: Fed officials

September 29
12:49 PM 2013

The US Federal Reserve had confused financial markets over its announced reduction of bond purchases. This was according to four top officials for the central bank said last Thursday. One of the four officials even argued that the Fed should link reduction in the jobless rate. Meanwhile, another top official said that a broad remake of strategy was needed for the Federal Reserve.

The decision to keep the monthly bond buying pace at USD85 billion was seen as a "close call" according to Fed Board Governor Jeremy Stein. This was after the Federal Reserve announced that it would not reduce its bond acquisitions at the moment.

Stein told a monetary conference in Germany, "But whether we start in September or a bit later is not in itself the key issue - the difference in the overall amount of securities we buy will be modest. What is much more important is doing everything we can to ensure that this difficult transition is implemented in as transparent and predictable a manner as possible. On this front, I think it is safe to say that there may be room for improvement."

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