Fed Begins Preparing Market for Exit

Since the financial markets collapsed in 2008, the Federal Reserve has taken unprecedented steps to keep the U.S. economy going. Most recently, it attempted to respond to the elevated unemployment rate with a second round of quantitative easing. That is set to end in June, but the Fed is already taking steps wean the market off its support when the time is right. Caroline Salas from Bloomberg explains what the Fed's doing to prep its exit strategy. Here's an excerpt:

In the week after the Federal Open Market Committee's Jan. 25-26 meeting, policy makers issued three announcements about expanding the number of counterparties for transactions that will help drain the record amount of cash added to the financial system. Brian Sack, the New York Fed's markets-group head, added more details about the preparations in a Feb. 9 speech, and New York Fed President William Dudley reiterated last week that officials have the ability and will to withdraw their stimulus when necessary.

Read the full story at Bloomberg.

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Daniel Indiviglio was an associate editor at The Atlantic from 2009 through 2011. He is now the Washington, D.C.-based columnist for Reuters Breakingviews. He is also a 2011 Robert Novak Journalism Fellow through the Phillips Foundation. More

Indiviglio has also written for Forbes. Prior to becoming a journalist, he spent several years working as an investment banker and a consultant.

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