Bernanke reiterates Fed monetary policy
Ben Bernanke made moves to allay fears the Fed has changed course on its monetary policy, announcing QE easing will only be implemented if the all economic requisites are met.
Ben Bernanke made moves to allay fears the Fed has changed course on its monetary policy, announcing QE easing will only be implemented if the all economic requisites are met.
Gold has fallen below $1200 for the first time in nearly three years following a widespread sell off as a result of the Fed’s announcement that it could start tapering its QE programme.
Markets dropped following Ben Bernanke’s announcement the Fed could start tapering QE before the end of the year, with a view to bringing it to an end mid-2014 should economic conditions remain viable.
When it comes to training for a marathon tapering is seen as a good thing. Any mention of the tapering of QE from Ben Bernanke, on the other hand, and markets are hit with a crisis of confidence.
Ben Bernanke has expanded the Federal Reserve’s quantitative easing (QE) programme and adopted new thresholds for interest rates, moving the central bank further into uncharted territory.
Policy meetings by the Federal Reserve and European Central Bank both left current policy unchanged but both are hinting at future policy changes.
The Federal Reserve has extended Operation Twist and is to spend a further $267bn on long-dated securities by the end of the year.
Markets have often been warned to not fight the Fed. Bill Dinning gives three reasons why this now needs to be widened as other central banks sign up to ongoing support.
Even though the eurozone is still in crisis and the Fed has lowered its foreacast growth rate for the US, Bob Doll argues that for markets the worst is over.
The Fed is to buy and sell $400bn of US Treasuries to boost corporate business borrowing and consumer mortgage lending.
Coutts looks to quality as deleveraging and low growth looks set to dominate.
Central banks have to come up with measures outside QE to stimulate growth and recduce debt levels.