As widely expected, the Fed voted to start reducing its portfolio starting in October, and kept interest rates at a range of 1% to 1.25%. “The basic message here is that US economic performance has been good,” Fed chair Janet Yellen said at a press conference. Stock markets have continued to set new records despite Yellen’s clear signals that the giant sell-off is coming and that interest rates are likely to continue their slow and steady climb back towards historical norms. Former Fed chair Ben Bernanke started the giant stimulus programme, known as Quantitative Easing (QE), in 2008 after the financial crisis plunged the world economy into the worst recession since the Great Depression. “Evaluating the effects of monetary policy is difficult, even in the case of conventional interest rate policy,” St Louis Fed economist Stephen D. Williamson wrote recently.

Source: The Guardian September 20, 2017 18:11 UTC