Fed to taper QE in coming months amid positive data

Minutes from the FOMC gathering in October revealed heated discussions of different QE tapering scenarios as positive data could soon spur a cut in the $85 billion monthly bond-purchases. Policymakers were considering introducing a schedule for the scale- down of the massive stimulus in order to ensure that a possible rise in interest rates that might slow economic growth and undermine gains in labour market is not triggered, as well as changes to the forward guidance on the central bank's main policy instrument– the federal funds rate. A day earlier Fed Chairman  Ben Bernanke stressed out that the rate would stay at virtually zero long after QE has halted.  

At the end of October the FOMC, the main decision-making body of the Fed, decided to maintain $85 billion pace of purchases in mortgage and treasury securities. It was widely expected as fiscal policy became a drag on the economy last month after political deadlock. St Louis Fed President James Bullard hinted that the central banks could reduce asset purchases at the looming December meeting if the coming jobs data confirm a stronger labour market trend. 

Meanwhile, some mixed data was published yesterday, as consumer prices unexpectedly fell 0.1% in October, while retail sales growth exceeded estimates, rising 0.4%.