Fed minutes show no change in asset purchase plan

By Ovunc Kutlu

ANKARA (AA) - The US Federal Reserve is in no hurry to change but will continue its asset purchase plan as a response to the coronavirus pandemic, minutes of its latest meeting showed Wednesday.

"Participants judged that immediate adjustments to the pace and composition of asset purchases were not necessary," the Federal Open Market Committee (FOMC) said Nov. 4-5.

FOMC members, however, said they are aware of the effect of COVID-19 on the US economy and indicated "circumstances could shift to warrant such adjustments."

Several members warned there could be "unintended consequences" if there is a significant expansion in the Fed's asset holdings.

As a part of a quantitative easing method, the asset purchase program allows the central bank to raise the money supply in the market by buying assets or debt from private banks and markets to provide more liquidity to help revive the economy.

The FOMC minutes came as a blow to the stock market, which hoped for more monetary stimulus from the Fed to weather weak economic activity before a potential fiscal stimulus from Congress after Jan. 20 when President-elect Joe Biden takes office.

The Dow Jones and S&P 500 dipped 0.6% and 0.2%, respectively, at 1430 EDT (1930 GMT), while the Nasdaq was up almost 0.4% with help from tech firms such as Amazon, Twitter and Zoom shares which remaining strong.