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Words in the News

Fed scales back stimulus effort
20 December 2013
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The US central bank, the Federal Reserve, says it will next month begin scaling back a
key strategy to stimulate the economy because of a stronger jobs market. The Fed said
that from January it would reduce its spending on US government bonds by $10bn a
month. The BBC's Mark Gregory reports.

The Federal Reserve has been pumping money into the US economy by buying $85bn of
bonds each month. From January, it will cut the figure to $75bn. And it has signalled
that it will further reduce the scale of its bond buying if the economy continues to
improve.

It's a small but highly significant step towards unwinding the extraordinary measures
put in place to support the economy through six years of deep crisis.

The decision follows a run of data pointing to sustained if weak recovery and - the key
factor - an improving jobs market.

But the Fed hasn't entirely kicked away the monetary props. It plans to keep short
term lending rates at near 0% until it sees at least another 0.5% drop in the
unemployment rate.

Investors responded by sending share prices higher. There was relief at the end to
uncertainty over when the Fed, as has seemed inevitable for months, would start
tapering off its monetary life support.

Words in the News © British Broadcasting Corporation 2013

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 Vocabulary and definitions

pumping (here) putting large amounts of

signalled indicated

unwinding (here) reversing the policy

kicked away removed totally

props structures to provide support

tapering off gradually reducing until there is nothing left

Read and listen to the story and the vocabulary online:

http://www.bbc.co.uk/worldservice/learningenglish/language/wordsinthenews/2013/12/131220_witn_fed.shtml

Related story:
http://www.bbc.co.uk/news/business-25436982

Words in the News © British Broadcasting Corporation 2013

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