Fed's Evans: Open to December taper, but prefers to wait

Fri Dec 6, 2013 7:24pm EST
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By Ann Saphir

CHICAGO (Reuters) - A top Federal Reserve official, who has been one of the most ardent supporters of the U.S. central bank's bond-buying stimulus program, said he was open to curtailing the purchases this month, although he would prefer to wait.

The comments from Charles Evans, the president of the Federal Reserve Bank of Chicago, suggest a strong report on November jobs growth on Friday has brought the Fed closer to reducing its third round of quantitative easing, known as QE3.

U.S. nonfarm payrolls expanded by a greater-than-expected 203,000 jobs in November, with the unemployment rate dropping to a five-year low of 7 percent. <US/JOBS1>

"I'll be open-minded," Evans said in an interview with Reuters Insider, when asked whether he would support trimming the Fed's stimulus at its policy meeting on December 17-18.

"Everything else (being) equal, I would like to see a couple of months of good numbers. But this was improvement."

The jobs data cheered Wall Street. The Standard & Poor's 500 Index broke a five-day losing streak and ended Friday's session with a gain of 1.12 percent gain. U.S. government bond prices were little changed.

It also led economists to move forward their expectations for when the Fed would begin to taper its purchases of $85 billion a month in bonds. A Reuters poll of top bond dealers found that four of them now expect the central bank to trim its purchases this month, and five look for a move in January, while eight see them holding off until March. <FED/R>

One of Evans' colleagues, Charles Plosser, the president of the Federal Reserve Bank of Philadelphia, said the November jobs report was more evidence that the U.S. central bank should end the bond-buying program.   Continued...

Chicago Federal Reserve Bank President Charles Evans speaks during the Sasin Bangkok Forum in this file photo from July 9, 2012. REUTERS/Sukree Sukplang/Files