FILE PHOTO – Federal Reserve Board Chairwoman Janet Yellen speaks during a news conference after the Fed releases its monetary policy decisions in Washington, U.S. on June 14, 2017. REUTERS/Joshua Roberts/File Photo
By Howard Schneider
WASHINGTON (Reuters) – Prospects for tighter monetary policy in Europe and other countries could pose a fresh problem for the Federal Reserve when it meets next week to ponder its plan to reduce its $4.2 trillion bond portfolio purchased after the 2008 financial crisis.
The Fed bought U.S. Treasuries and mortgage-backed securities (MBS) for about six years in a program known as “quantitative easing” which kept interest rates at record lows to spur borrowing and economic recovery.
But at its June meeting this year, as well as raising interest rates for the third time in six months, the Fed also announced a plan to begin by letting $6 billion a month in Treasuries mature without…
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