Prices drop after Fed minutes show support for taper
NEW YORK (REUTERS) - US Treasury prices fell on Wednesday as minutes of the Federal Reserve's January meeting showed members supported continued tapering of the central bank's bond-buying program in the absence of a significant change in the economy.
The minutes showed members on the Fed's policy setting committee wanted to affirm that its asset-purchase program would be trimmed in predictable US$10-billion (S$12.6 billion) steps.
The Fed is seen likely to continue paring its monthly purchases as Fed members view much of the recent economic weakness as a temporary phenomenon that is due to unseasonably cold weather.
"It suggests that they see the recent weakness in economic activity as fairly transitory. They don't think this is a permanent trend. Even if we see lower growth in 2014 they will still continue to taper," said Gennadiy Goldberg, an interest rate strategist at TD Securities.