The Taper Chase
Global financial markets were stunned when the US Federal Reserve announced on September 18 that it was not ready to begin the widely anticipated slowdown of its long-term asset purchases. There are three possible reasons why the Fed shifted its plans so dramatically, and all point to continuation of quantitative easing.
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CAMBRIDGE – Global financial markets were stunned when the US Federal Reserve announced on September 18 that it was not ready to begin the widely anticipated reduction in the pace of its “quantitative easing” (QE) program. Fed Chairman Ben Bernanke said that the Fed would continue its monthly purchases of $85 billion of long-term securities. Understanding the reasons for the Fed’s unexpected change of plans may help to anticipate what is coming next.