- Michael Gregory, head of U.S. economics at BMO Capital Markets Ltd
29 October will go down to history as the day when the Fed finally concluded the largest and most aggressive asset-buying programme in the history of the US, which had supported the world's number one economy since the onset of the financial crisis in 2008. The Fed the decision despite the recent elevated volatility in financial markets as well as global economic woes. The six-year old quantitative easing allowed the central bank to buy trillions of dollars of mortgage and US treasury bonds from banks and hedge funds to keep interest rates at zero. Now market participants' curiosity turns to when the Fed will ultimately raise interest rates, with all expectations set to 2015 rate hike, as the Fed indicated the necessity to "keep the current target range for the federal funds rate a considerable time after the asset purchase programme ends". However, what is more important is how the Fed plans to get rid of abundant number of assets it has purchased.
All in all, the Fed sounded fairly optimistic about the nation's economy, as unemployment rate tumbled to 5.9%, the lowest level in six years, while employers have been adding more than 200,000 jobs a month so far this year, and consumers and businesses have been gradually increasing their spending. Also, despite the fact that consumer inflation has been running below the Fed's 2% goal, the long-term inflation expectations have remained stable
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