BBVA Compass economists predict the Fed will announce tapering of stimulus

HOUSTON, Sept. 16, 2013 /PRNewswire/ -- Investors should be prepared for the Federal Reserve to announce that it will begin to pull back its bond-buying program during the closely watched  meeting it holds this week at the Fed's Board of Governors offices in Washington, D.C., BBVA Compass economists predict in their latest report.

"We expect the main policy change to be modification of Treasury purchases from $45 billion to $40 billion" per month, BBVA Compass economist Shushanik Papanyan wrote in the report.

The purchase of mortgage-backed securities is expected to remain steady at $40 billion monthly, the report says.

The Fed's Open Market Committee meets on Tuesday and Wednesday. At the end of the meetings, Chairman Ben Bernanke will hold a press conference, which will be closely followed by the financial world for hints about changes to the Fed's economic policy strategy. Many academics believe the markets have already priced in a risk from a tapering of stimulus, Papanyan said, but there could be slight increases in long-term Treasury yields and declines in equities after the press conference.

Led by BBVA Compass Chief Economist Nathaniel Karp, the bank's six-member research team analyzes the U.S. economy and Federal Reserve monetary policy. For their analyses, the economists create models and forecasts for economic variables such as growth and inflation, as well as for monetary policy and other industries.

The bank's economic research group also includes Kim Fraser, Jason Frederick, Boyd Nash-Stacey and Marcial Nava. Follow their work on Twitter @BBVAResearchUSA.

About BBVA Group
BBVA Compass is a subsidiary of BBVA Compass Bancshares Inc., a wholly owned subsidiary of BBVA (NYSE: BBVA) (MAD: BBVA). BBVA is a customer-centric global financial services group founded in 1857. The Group has a solid position in Spain, is the largest financial institution in Mexico and has leading franchises in South America and the Sunbelt region of the United States. Its diversified business is geared toward high-growth markets and relies on technology as a key sustainable competitive advantage. Corporate responsibility is at the core of its business model. BBVA fosters financial education and inclusion, and supports scientific research and culture. It operates with the highest integrity, a long-term vision and applies best practices. The Group is present in the main sustainability indexes. More information about the BBVA Group can be found at www.bbva.com.

About BBVA Compass
BBVA Compass is a Sunbelt-based financial institution that operates 688 branches, including 352 in Texas, 90 in Alabama, 78 in Arizona, 64 in California, 45 in Florida, 38 in Colorado and 21 in New Mexico. BBVA Compass ranks among the top 25 largest U.S. commercial banks based on deposit market share and ranks among the largest banks in Alabama (2nd), Texas (4th) and Arizona (5th). BBVA Compass has been recognized as one of the leading Small Business Administration lenders and was recently awarded the 2013 Celent Model Bank Award for its new core banking platform. Additional information about BBVA Compass can be found at www.bbvacompass.com.

Editor's Note:
BBVA Compass is a trade name of Compass Bank, member FDIC.

Video with caption: "BBVA Compass Economist Shushanik Papanyan provides her Federal Reserve policy outlook." Video available at: http://origin-qps.onstreammedia.com/origin/multivu_archive/PRNA/ENR/FX-DA80330-20130916-02.mp4

SOURCE BBVA Compass

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