Fed to Start Paring Holdings, Keeps December Rate Rise on the Table

Fed to Start Paring Holdings, Keeps December Rate Rise on the Table

WASHINGTON—The Federal Reserve indicated Wednesday it remained on track to raise short-term rates later this year and said it would begin shrinking its portfolio of bonds next month, starting to close the books on an unprecedented and widely controversial policy experiment. The Fed left rates unchanged and has scheduled one more rate rise in 2017. This course of action signals The Fed has optimism about the outlook of the economy. “The basic message here is U.S. economic performance has been good,” Fed Chairwoman Janet Yellen said at a press conference. “The American people should feel the steps we have taken to normalize monetary policy…are well justified given the very substantial progress we’ve seen in the economy.”

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