Federal Reserve

Investors predicting historically-low interest rates will rise after the end of quantitative easing are misguided, M&G's fixed income desk have said.

The US Federal Reserve has maintained the gradual tapering of its QE programme after a meeting which suggests some members are pushing harder for a more hawkish monetary policy.

US GDP growth has risen more than expected in Q2, according to initial estimates, with the contraction in the first quarter less bad than had been feared.

EUROPE

The US Federal Reserve has said it will end its purchases of government bonds in October, bringing to a close the quantitative easing experiment.

US Fed chair Janet Yellen has said the 2008 financial crisis would not have been prevented had interest rates been higher, adding that fresh concerns about financial stability now should not prompt a rate increase.

The reversal of fortunes for the IMA UK All Companies sector this year has again raised the question of whether investors' buying patterns are leaving them exposed to market corrections.

'This market offers no extreme outliers'

European markets climbed this morning following the release of a dovish statement from the Federal Reserve about the growth outlook for the world's largest economy.

Nick Gartside, CIO, global fixed income group, J.P. Morgan Asset Management, discusses the possible impact of the ECB's recent policy action to boost the health of the eurozone.