DAVID GREENE, HOST:
NPR's business news starts with some of the shine off the stock market.
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GREENE: OK, after a big run up in prices, global stock markets stumbled today. Japan's Nikkei dropped more than seven percent. European markets are down two to three percent, and here in the United States the Dow and S&P averages are both down less than one percent. One reason for all this investors selling analysts say, is new indications from the U.S. Federal Reserve and Fed Chief Ben Bernanke about a pull back in quantitative easing. That's the economic stimulus program the Fed has been using to boost the economy.
Here's NPR's John Ydstie.
JOHN YDSTIE, BYLINE: Bernanke's comments and the Fed's minutes show Fed officials are inching closer to tapering off their stimulative bond purchases. Those purchases currently inject $85 billion into the economy each month.
During a hearing on Capitol Hill yesterday, the chairman of Congress' Joint Economic Committee, Texas Republican Kevin Brady, asked Bernanke when the process of removing the stimulus might begin.
REPRESENTATIVE KEVIN BRADY: At the pace we're going, do you think it's likely these actions will begin before Labor Day?
BEN BERNANKE: I don't know. It's going to depend on the data. If the outlook for the labor market improves and we are convinced that that is sustainable, we will respond to that. If the recovery were to falter, then we would delay that process.
YDSTIE: There are concerns that reducing the stimulus could undermine the financial markets which have risen sharply, fueled by the Fed's action.
Bernanke eased one big concern on that front yesterday. He said he now believes the Fed can exit its stimulative program without selling off the assets it purchased during its quantitative easing campaign.
Selling hundreds of billions of dollars worth of those assets could have seriously disrupted the financial markets.
John Ydstie, NPR News, Washington.
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