U.S. Fed surprises by sticking to stimulus

Sep 18, 2013, 6:28 PM EDT
U.S. Federal Reserve Board Chairman Ben Bernanke holds a news conference following the Fed's two-day Federal Open Market Committee (FOMC) meeting in Washington September 18, 2013.
REUTERS/Gary Cameron

The U.S. Federal Reserve said that it would continue buying bonds at an $85 billion monthly pace for now, surprising financial markets that were braced for a reduction in the central bank's economic stimulus. Citing strains in the economy from tight fiscal policy and higher mortgage rates, the Fed decided against the tapering of asset purchases that investors had all but priced into stock and bond markets. In the wake of the statement, equities and gold soared, bond yields and the dollar sank.