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Federal Reserve Building
FILE- This March 27, 2009, file photo, shows the Federal Reserve Building on Constitution Avenue in Washington. With an eye on the �fiscal cliff,� the Federal Reserve is expected to announce a new bond-buying plan to support the U.S. economy on Tuesday, Dec. 11, 2012. (AP Photo/J. Scott Applewhite, File)

Fed Will Reduce Bond Purchases by $10B in January



WASHINGTON (AP) - The Federal Reserve says it will reduce its $85 billion a month in bond purchases by $10 billion starting in January, citing a stronger U.S. job market. And it says it will take further steps to reduce the pace of the purchases next year if that improvement continues.

The reduction is a signal that Fed policymakers are ready to ease their massive support for the economy provided since the Great Recession. The bond purchases have helped keep long-term interest rates low to encourage more borrowing and spending.
  
To cushion to impact on financial markets, the Fed strengthened its commitment to record-low short-term rates. It says it plans to hold its key short-term rate near zero "well past" the time when unemployment falls below 6.5 percent.
 

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