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Fed to focus on “data over date” in adjusting bond-buying

126px-US-FederalReserveSystem-Seal.svgFederal Reserve Governor Jerome Powell said on Thursday that the central bank would prioritize “data over date,” adding that the Fed’s bond-buying program will be adjusted based on economic data rather than with a specific date in mind.

“If the Committee’s economic outlook is broadly realized, there will likely be a moderation in the pace of purchases later this year,” Powell said. “If the performance of the economy is weaker, the Committee may delay before moderating purchases or even increase them. If the economy strengthens faster than the Committee anticipates, the pace of purchases may be moderated somewhat more quickly. The path of purchases is in no way predetermined; we will monitor economic data and adjust our purchases as appropriate.”

Powell’s comments come just one week after Federal Reserve Chairman Ben Bernanke said the moderation of asset purchases would come later this year if the economic data is consistent with the Federal Reserve committee’s economic outlook.

Bernanke also said that the pace of asset purchases would continually be reduced through the first half of next year, ending around mid-year, as long as the subsequent data aligned with economic expectations. The Federal Reserve expects unemployment to hover around seven percent next year.

“There are many signs that the economy is healing,” Powell said. “If the Committee’s economic outlook is broadly realized, and we do see the first moderation in the pace of purchases later this year, that would be good news. The first reduction in purchases, when it comes, will be an acknowledgement of the economy’s progress and a sign of the Committee’s confidence in the path to full recovery.”

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