The Fed has been buying $85 mil­lion in bonds each month, and said it will con­tinue to do so until the out­look for the job market improves sub­stan­tially. When the Fed does pull back on the bond-​​buying pro­gram, Bernanke said it will be like a driver taking a foot off the gas, rather than slam­ming on the brakes.

Alan Clayton-​​Matthews, an econ­o­mist at North­eastern Uni­ver­sity, said the news from the Fed was more of the same.

It doesn’t appear to be any dif­ferent stance,” he said. “It’s neu­tral. It’s steady as she goes.”

Clayton-​​Matthews said ending the bond-​​buying pro­gram will be a tricky step to navigate.

That’s the whole point of Fed policy, to time it cor­rectly,” he said. “The main pur­pose of the state­ment was that finan­cial mar­kets would have some idea of what the Fed’s policy would be. It plays down the chance of finan­cial mar­kets being surprised.”

The Dow Jones indus­trial average closed down 206 points yes­terday, as investors sold off stocks and bonds.

But Clayton-​​Matthews warned that the effects of the Fed’s policy state­ment would become clearer in 
the coming days.

Wall Street can respond to this in any number of 
rational or irra­tional ways,” he said.

Read the article at The Boston Herald →