Wednesday Afternoon Business Brief
December 18, 2013, 2:25 PM
- The stock market is up sharply after the Federal Reserve's surprise decision to dial back its economic stimulus. In the minutes after the Fed's announcement, the Dow Jones industrial average was up more than 150 points. The Standard & Poor's 500 index rose 11 points and the Nasdaq composite gained five.
- The Federal Reserve says it will reduce its $85 billion a month in bond purchases by $10 billion starting in January, citing a stronger U.S. job market. And it says it will take further steps to reduce the pace of the purchases next year if that improvement continues. To cushion to impact on financial markets, the Fed strengthened its commitment to record-low short-term rates. It says it plans to hold its key short-term rate near zero "well past" the time when unemployment falls below 6.5 percent.
- The Federal Reserve expects unemployment to fall a bit more over the next two years than it thought in September and expects inflation to remain below the Fed's target level. The Fed predicts the unemployment rate will dip as low as 6.3 percent next year and 5.8 percent in 2015. It's now 7 percent. The Fed estimates that economic growth will be between 2.8 percent and 3.2 percent next year, while growth for 2013 will likely be about 2 percent.
- Purchasers of health care coverage are going to get some additional time to pay. The health insurance industry says consumers who select a plan by Monday, Dec. 23, will have until January 10th to pay their first month's premium. That's instead of a previous New Year's Eve deadline set by the government. For coverage to take effect, consumers will have to make sure they pay their initial premium on time.
- Taxpayers eager to get refunds will have to wait an extra 10 days to file their federal tax returns. The Internal Revenue Service says the government shutdown has forced it to delay tax filing season until Jan. 31 instead of Jan. 21. The IRS says the 16-day shutdown in October interrupted workers who were programming and testing the agency's processing systems.
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