US Federal Reserve Tapering: A Soft Landing?
The US Federal Reserve Bank (Fed) announced a tapering of its bond buying program (QE3) following a meeting of its Federal Open Markets Committee (FOMC) last week. Its purchase of US bonds ($40 billion) and mortgage-backed securities ($35 billion) has been reduced by $10 billion from $85 billion to $75 billion a month. The announcement, while anticipated in the near future by markets, came earlier than expected. Only 37% of economists polled by Bloomberg expected the Fed to announce the commencement of its tapering program at its December 2013 FOMC meeting.