Data did not support tapering bonds, says Federal Reserve chief

Federal Reserve Bank of Boston president Eric Rosengren, a consistent backer of record stimulus who votes on policy this year, said the Fed refrained from tapering its bond purchases last month because growth was lower than forecast and fiscal policy posed a risk to the outlook.

“Had US fiscal matters not been so problematic, and incoming data on real GDP and employment stronger, it may well have been appropriate to take some action in September,” Rosengren said. “Unfortunately, those were not the facts we faced” at a policy meeting on Sept 17-18.

The Federal open market committee surprised investors last month by maintaining its $85bn (€62.5bn) monthly pace of bond purchases. The Fed kept stimulus in place as Congress debates how to resolve the first government shutdown in 17 years and whether to raise the nation’s debt limit.