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Th e M Rep o RT | 59 O r i g i nat i O n s e r v i c i n g a na ly t i c s s e c O n da r y m a r k e t SECONDARY MARKET Department Fed continues to scale Back Qe, Hints that end is near Quantitative easing may soon be a thing of the past. m ore than two years after the central bank kicked off its latest economic stimulus program, policymak- ers at the Federal Reserve once again voted to scale down monthly asset purchases—and hinted that the end is in sight. In a statement released fol- lowing the end of the Federal Open Market Committee's latest meeting, the Fed announced that, as of last month, it would dial back its monthly purchases of agency mortgage-backed securi- ties and Treasury securities to a combined pace of $15 billion per month. The bond-buying program has been on a steady downward slope since January after the Fed's announcement late last year that it had decided to start tapering its stimulus thanks to improving economic conditions. Barring any significant setback in the economy, the committee announced it could soon end its asset purchases. While the central bank evi- dently sees enough momentum for the economy to roll on at a "moderate pace," forecasts from the committee were mixed. In a separate report of economic pro- jections, the committee predicted a drop in growth compared to its June forecast, with GDP set to expand 2 to 2.2 percent for 2014, down from 2.1 to 2.3 per- cent previously. At the same time, the labor market outlook was brighter, with the committee calling for an unemployment rate of 5.9 percent to 6 percent by the end of the year. In looking ahead to its next step, the Fed stayed committed to its usual language, maintain- ing it will keep its current target range for the federal ranges rate for a "considerable time" after the end of the program. Just how long the Fed thinks to be a "considerable time" has been a matter of speculation among investors and economists. At a press conference in March, Fed Chair Janet Yellen hinted that rate increases could come as soon as six months after the end of the current easing program, sending waves through the markets. Since then, she's been more careful with her wording, insisting in the press conference that the decision will not be calendar-based. "It is highly conditional, and it is linked to the committee's assessment of the economy," she said. A recent survey of economists by the Wall Street Journal found most don't expect the first hike to come until June next year. Paul Edelstein, director of financial economics for IHS Global Insight, agreed with the June prediction. "The tone of the Fed's latest policy statement was decidedly dovish," he said in a note. "There was some hesitancy over current conditions and the forward guid- ance was left intact. However, this was not enough to alter the gen- eral course of monetary policy." The committee's monetary policy action passed with an 8–2 vote. Casting votes against the action were Dallas and Philadelphia Fed presidents Richard Fisher and Charles Plosser. While Plosser's objection was based on the Fed's choice of the phrase "considerable time," which he said reflects a time- dependent policy, Fisher's stance was more hawkish. According to the Fed statement: "President Fisher believed that the continued strengthening of the real econo- my, improved outlook for labor utilization and for general price stability, and continued signs of financial market excess will likely warrant an earlier reduction in monetary accommodation than is suggested by the committee's stated forward guidance."