Fed prepared to end purchases of Treasurys, mortgage-backed securities by mid-2014

The Federal Reserve may taper its $85 billion-a-month Treasury and mortgage-backed securities habit later this year and wind those purchases down altogether by mid-2014 if the economy keeps chugging along, Fed Chairman Ben Bernanke said today — news that sent bond prices plummeting and yields soaring. But Bernanke said the Fed will likely hold onto the mortgage securities it’s purchased so far, which should keep mortgage rates from rising too quickly. Source: federalreserve.gov.