The beginning of the end of QE

Recent data indicates the Fed’s likely to start scaling back in September, and Wall Street isn’t happy. But the central bank is unlikely to go cold turkey.

The US stock market remains in a tizz over the prospect of the Federal Reserve scaling back its quantitative easing in the not too distant future. It is a perverse reaction given that the only condition on which the Fed has said QE will be scaled back is if and when the economy has improved and that that improvement is on a sustainable trend. 

US stocks fell 0.4 per cent overnight to register three straight falls that total 1.1 per cent. These are not large falls but rather reflect the fickle mood of the market.

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