Japan, the second-largest holder, lowered its holdings by $20.3 billion to $1.083 trillion.
Fed’s Tapering
The Fed may start to taper its $85 billion in monthly bond buying later in 2013 and halt purchases around mid-2014 as long as the world’s largest economy performs in line with its projections, Chairman Ben S. Bernanke told reporters June 19 after a two-day meeting of the Federal Open Market Committee.
His description of the end of quantitative easing indicates that Fed officials see the economy finally healing from a burst credit bubble that deflated housing prices by 35 percent over almost six years, left one in 10 American workers unemployed in October 2009 and prompted the biggest overhaul of financial regulation since the 1930s.
The Standard & Poor’s 500 Index dropped 1.5 percent in June, the first monthly decline since October 2012. Investors in U.S. Treasuries lost 1.4 percent that month, according to Bloomberg World Bond Indexes. The Bloomberg U.S. Dollar Index, a gauge of the greenback’s value against 10 major currencies weighted by liquidity and trade flows, gained 0.3 percent in June.