U.S. Fed to keep buying bonds

AFP-JIJI

The Federal Reserve kept its easy-money policies Wednesday but left the door open to step up bond purchases if the economy slowed under the government’s severe “sequester” spending cuts.

The central bank’s policy board, the Federal Open Market Committee, said after a two-day meeting that the economy continued to grow at a “moderate” pace. But it also said that growth was being restrained by the government’s tighter fiscal policy, which imposed tax hikes in January and across-the-board spending cuts in March.

The Fed suggested, in a change from previous statements, that it would keep open the option of more stimulus — larger bond purchases — if the economy slows.