Fed taper 'a step in the right direction'

Markets have rallied today following the Federal Reserve's move to scale back its quantitative easing programme as the US economy recovers.

Federal Reserve chair Ben Bernanke said the central bank will taper its bond buying programme by $10bn a month from January 2014, taking it from $85bn to $75bn. Despite earlier fears the end of QE would remove a crucial support for risk assets, investors now broadly welcome the gradual move to taper, as it indicates the Fed's confidence in the economic recovery. Trevor Greetham, director of asset allocation at Fidelity Worldwide Investment, said the move will pave the way for Janet Yellen's takeover as head of the central bank next year. He said: "I am not surprised Bernanke starte...