Our Economic and Market Research team outline and analyze the decisions of the Federal Reserve's Federal Open Market Committee meeting overnight.
The Federal Reserve's (the Fed) Federal Open Market Committee met overnight and have announced a further and final reduction in the bond purchasing stimulus program (QE3). The end of the QE3 program signals a renewed confidence in the strength of the recovery of the US economy- despite recent volatility in markets.
The Fed has pointed to the strengthening of the labour markets and "sufficient underlying strength in the broader economy" in justifying the final reduction.
Talk will now begin to center on when the Fed will begin to consider implementing an interest rate as they move down the path towards monetary policy normalization.