WASHINGTON — The Federal Reserve said Wednesday that it would gradually end its bond-buying program during 2014, a modest first step toward unwinding the central bank’s broader stimulus campaign as its officials gain confidence that the economy is growing steadily.
The Fed plans to cut its monthly purchases of Treasury and mortgage-backed securities from $85 billion in December to nothing by the end of next year in a series of small steps, starting with a reduction to $75 billion in January, the central bank announced after a two-day meeting of its policy-making committee.
At the same time, the Fed sought to offset concerns that it was once again pulling back too soon by strengthening its plans to hold short-term interest rates near zero, which officials regard as a more powerful means of stimulating growth. Both policies aim to hold down borrowing costs and revive risk-taking.
The Fed’s shift in policy, in effect, means it plans to do less now and more later. Full story for BostonGlobe.com subscribers.