Deviation Actions

Credence Independent Advisors - US Federal Reserve

By

Published: Nov 19, 2014

1.2K Views

Description

Central bank’s head, Janet Yellen, confirms cessation of buying bonds in October after injection of £4.5 trillion over five years.

The US Federal Reserve has called time on its $4.5 trillion (£2.8tn) quantitative easing programme, introduced more than five years ago to steer the world’s largest economy through the financial crisis.

The central bank, led by Janet Yellen, said it would cease buying bonds this month.

Announcing the decision made at its October policy meeting, the Fed said: “The committee judges that there has been a substantial improvement in the outlook for the labour market since the inception of its current asset purchase programme. Moreover, the committee continues to see sufficient underlying strength in the broader economy to support ongoing progress toward maximum employment in a context of price stability. Accordingly, the committee decided to conclude its asset purchase program this month.”

It brings to an end the programme which marked a radical departure for US monetary policy, hugely swelling the Fed’s balance sheet in a bid to prop up a battered financial system.

The Fed began to slow its purchase of Treasury bonds and mortgage-backed securities in January, but until now it had not confirmed an end date. The central bank has steadily reduced its monthly bond purchases from a peak of $85bn a month to $15bn a month.

Despite the end of its bond-buying programme, US monetary policy remains ultra-loose, with an interest rate range of between zero and 0.25% since December 2008.

Credence Independent Advisor was set up to be compelling for all its stakeholders; including clients, staff and owners of the business. We offer a compelling experience to our clients that delivers what they desire. We strive to fully understand our clients’ financial requirements by remaining in close communication with them over the entire span of the relationship. We endeavor to provide our clients with a financial educational framework which supports them in their investment decision making process, helping them to achieve their financial goals. We align our interests along with those of our clients to ensure the development of a long and fruitful relationship.

Contact us
Emaar Boulevard Plaza, Level 14,

Burj Khalifa Downtown,

P.O.Box 334155, Dubai, UAE