Fed: Federal Open Market Committee

Federal Open Market Committee: Shortly after the Federal Reserve hinted in May that it might start to ease its monetary stimulus, rich-country bond yields shot up and emerging-market currencies and stock markets cratered. Was it all for nothing? On Sept. 18, at the end of a closely watched meeting, the Federal Open Market Committee, the Fed's policy-setting body, chose not to taper. Instead it said that it would keep buying $85 billion a month of Treasury and mortgage bonds with newly created money the policy known as quantitative easing or QE, according to The Chronicle Herald. So what has held it back now and Although the Fed had never actually promised to act in September, all the signals pointed in that direction. QE would stop, it had said when the latest bout of bond-buying began last September, when the labour-market outlook had improved substantially. Since then the unemployment rate has dropped to 7.3 per cent from 8.1 per cent and private employment has risen by 2.3 million, or 2 per cent. In June Fed chairman Ben Bernanke said that the Fed probably would start to taper by year-end, and stop QE when unemployment hit 7 per cent, which it expected by mid-2014. (www.immigrantscanada.com). As reported in the news.