Question Details
When will the FED reduce the QE?
kruijs in
Business
» Economics
Settled on 09/18/2013 20:25 Settled by
kruijsAnalysts on and off Wall Street were surprised, to put it mildly. Markets responded very well to news of continued easy-money policy. The mainstream consensus was that the Fed would begin to taper off its $85 billion monthly bond purchases by around $10 or $15 billion each month. Current pricing just didn't take continued bond buying into account, and the bullish reaction was immediate, intense, and widespread.
http://moneymorning.com/2013/09/18/breaking-bernanke-to-continue-controversial-bond-buying-program/
Predictions
Background
What do the markets do? They panic.
They panicked because when Ben Bernanke announced that the Fed will be forking out $85 billion a month purchasing bonds – otherwise known as QE – (QE3, or maybe 4, depending on how you define these things), he said that once the economy improves, and unemployment falls to a certain level, the QE campaign will be cut down, and eventually stopped.
They panicked because Mr Bernanke confirmed that he hasn’t changed his mind and that if things carry on improving, QE will be reduced later this year (September being the expected month).
He also confirmed that if things carry on improving next year and the year after that interest rates may rise in 2015.
Certain things in life are predictable, Mr Bernanke’s comments yesterday, or at least their inference, falls in this category.
http://www.investmentandbusinessnews.co.uk/economy/ben-s-predictable-prediction-panics-markets-as-predicted/5045
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