Federal Reserve begins tapering massive bond-buying programme

As previously mentioned by Marc Farber, if there’s any ‘taper’, it will be largely symbolic and the problem will only resurface sometime soon down the road.

“So at some stage the economy will weaken again, and at that point, the Fed will argue, ‘Well, we haven’t done enough, we have to do more.'”

The Federal Reserve will reduce its $85bn a month in bond purchases by $10bn starting in January

The US Federal Reserve last night announced plans to start weaning America off quantitative easing (QE), in a move which signals the central bank’s confidence in the stability of the US economy.

The central bank said that it will pare its $85bn-a-month bond buying scheme back to $75bn next month, and continue ratcheting it down in “measured steps” if the US economic recovery remains on course. Continue reading