Federal Reserve Meets - WAOW - Newsline 9, Wausau News, Weather, Sports

Federal Reserve Meets

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WASHINGTON (AP) -- The Federal Reserve is signaling that its $600 billion Treasury bond-buying program will end in June as planned because the economy has strengthened and companies are starting to hire more.

Ending a two-day meeting Wednesday, the Fed made no changes to the program. The decision was unanimous. The bond purchases were intended to lower loan rates, encouraging spending and boost stock prices. But critics worried that the purchases would feed inflation.

The Fed downplayed inflation risks. It acknowledged a spike in oil prices, but concluded the pickup in inflation will be temporary.

As it winds down stimulus, the Fed is now shifting its focus on when and how it should start boosting interest rates to prevent inflation from getting out of control. Economists think the Fed will start raising rates later this year or early next year. Higher rates would reduce borrowing and spending and make companies less inclined to boost prices.

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