Fed is expected to further trim bond purchases

WASHINGTON (AP) — The Federal Reserve is expected Wednesday to further reduce its stimulus for the U.S. economy, even though that prospect has unsettled global financial markets.

The Fed announced last month that it would pare its monthly bond purchases from $85 billion to $75 billion. And it said that if the economy kept improving, it would likely further slow its bond buying at future meetings. The Fed's bond purchases have been intended to keep long-term loan rates low to spur spending and economic growth.

Most economists expect a string of $10 billion monthly reductions in bond purchases to be announced at each Fed meeting this year, ending with a final $15 billion cut in December.

The two-day Fed meeting that ends Wednesday will be the last to be presided over by Ben Bernanke, who's stepping down after eight years as chairman.

Stepping in his shoes next week will be Vice Chair Janet Yellen. She's expected to stick closely with Bernanke's policies.

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