As a sign of increased confidence in a stabilizing economy, the Federal Reserve is cutting back on its $85 billion per month bond-buying stimulus programs. This is the third round of easing off; the policy began in September 2012.
Beginning in January, the Federal Open Market Committee is tapering purchased of Treasury and mortgage-backed securities by $5 bill each, a 12.5% cut for the latter. Zero interest rates on Federal lending will remain unchanged.
It’s not a huge move – further cutbacks are expected in the future, it’s just unclear when that will happen as unemployment is still high and there is more recovery that needs to occur.