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Monday, October 27, 2014, Kartik 12, 1421, Muharram 2, 1436 Hijr


US Fed to enter new 'normal' with expected QE stimulus end
Publish Date : 2014-10-27,  Publish Time : 00:00,  View Count : 11
WASHINGTON, Oct 26:The US Federal Reserve is likely to make a final push into the post-crisis era this week with a decision to finally wind up its six-year-old economic stimulus operations.
A few worrisome clouds over the global economy might be expected to give Fed Chair Janet Yellen's Federal Open Market Committee pause when they meet on Tuesday and Wednesday.
But after repeatedly signaling the end this month of the bond-buying program known as quantitative easing, the Fed is unlikely to change course, analysts say.
The Fed is currently adding $15 billion in cheap funds to the economy per month under QE, down from $85 billion last December.
Injecting tens of billions of dollars each month into the economy to repress longer term interest rates has had less and less real impact, while generating what some worry are fresh bubbles in stock markets.
And despite deflation worries in Europe and a surge of concern over the global economy generally, QE3 -- the third edition of the operations -- has already been tapered to the point that continuing would be symbolic.
The chance that the FOMC might hold off remains. Last week James Bullard, head of the Fed's St Louis branch and a former FOMC member, said QE should continue until the data is more clear.
US inflation expectations are dropping, Bullard told Bloomberg TV.    ?AFP







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