Fed signals tapering of bond buying in "tantalisingly vague" message

Interest rates at bottom

The US Federal Reserve signalled it will start tapering its bond buying programme in its September announcement on Wednesday (22 September) in what some investment experts viewed as a “tantalisingly vague” message.

The Fed chair, Jay Powell, also said a reduction in the bond buying programme "may soon be warranted". Silvia Dall'Angelo, Senior economist at the International Business of Federated Hermes, pointed out that while there has been progress in the labour market and inflation would just justify a reduction in the pace of asset purchases, monetary conditions are likely to remain accommodative. "New risks concerning domestic political dynamics and international developments - most notably, turmoil in the Chinese property sector - have emerged," he explained. "All these considerations will...