US Federal Reserve ends QE stimulus programme

[webfact]

US Federal Reserve ends QE stimulus programme

(BBC) The US Federal Reserve has announced it is ending its quantitative easing (QE) stimulus programme begun in 2008.

The Fed said it was confident the US economic recovery would continue, despite a global economic slowdown.

The targets for inflation and reduction in unemployment were on track, the Fed said in a statement.

The central bank, which also said it would not raise interest rates for a "considerable time", has gradually cut back QE since last year.

'Sufficient strength'

The statement suggested that although the jobs market is strengthening, it is still not back to normal, which is why interest rates are being held.

"The Committee continues to see sufficient underlying strength in the broader economy to support ongoing progress toward maximum employment in a context of price stability," the Fed said.

Full story: http://www.bbc.com/news/business-29823798

-- BBC 2014-10-30

[terryp]

dont panic its only until they can think of a new idiotic name to call QE4.....or possibly they have passed the ball over to the ECB for their turn at screwing the World ....I guarentee that a few trillion of made-up money will be back into the liquidity fund just after New Year...the excuse will be a slow down in World Trade blah blah blah ...its all a scam people

[shirtless]

Watch the markets fall when the cheap money goes, mind you we never saw a cent .Democracy what a joke,

[lovetotravel]

Watch the markets fall when the cheap money goes, mind you we never saw a cent .Democracy what a joke,

The cheap money has been going for a long time. The markets have this already baked in. This announcement only saw a small drop in the market, which might have happened anyway after the huge gains the past few days.

As for never seeing a cent? Anybody who has a 401k stock plan, or has investments in the stock market, saw huge gains the past few years. I'm way up.

Also, don't forget QE was a huge help globally. It wasn't just about shoring up the US. We do live in a global economy after all. Everything's connected.

[mania]

Watch the markets fall when the cheap money goes, mind you we never saw a cent .Democracy what a joke,

The cheap money has been going for a long time. The markets have this already baked in. This announcement only saw a small drop in the market, which might have happened anyway after the huge gains the past few days.

As for never seeing a cent? Anybody who has a 401k stock plan, or has investments in the stock market, saw huge gains the past few years. I'm way up.

Also, don't forget QE was a huge help globally. It wasn't just about shoring up the US. We do live in a global economy after all. Everything's connected.

True the additional IOU's have been printing for quite sometime at amazing rates

But also about 401k/pensions etc I always thought it was a big reason why they initially did the bail-out/rescue

Because at the time of crash those had lost an awesome amount of value & they would have faced some very angry

citizens.

But to say that by creating massive future debts to be handed down to our children/grandchildren that anyone currently are way up or saw

huge gains may be stretching it.

Because if they hadn't allowed banks, Goldman Sachs etc. types to screw the pooch in the first place these same pensions would have

done just fine in their normal reasonable growth without that crash & would likely be as good or better off today.

That those same crews that were a big part of the cause of it all got extremely wealthy on the way up to the crash then on

the bail out on the way to recovery the present time is just a slap in the citizens face. My guess is it will historically be remember as the biggest wealth transfer ever.

While those who lived by the rules always expressed to us about debt & savings were basically robbed of interest & buying power then saddled with the debt

which has its own insurmountable interest charges growing daily.

Yes it helped postponed the pain globally as we saw much of the bail out was also in swaps to other International Central Banks. Yet in the end who gets to keep the bill?

The citizens of the US are no where near out of the woods & many would argue we are in a much deeper darker area than before QE

Many think we would have been better taking our medicine & repairing what was broken than to just kick the can down the road for our kids to inherit.

Of course it does not matter much for most of us given our ages. But our children & grandchildren are surely not being handed what we were given.

We did not leave this place as good or better than we found it that is certain

Edited October 30, 2014 by mania

[Loptr]

The POMO may have dried up, but the Plunge Protection Team still has a hand on the tiller...

[MJP]

Does this mean a global deflation from now until QE4?

[kamahele]

This is small money stuff. Since Congress did not like the word "stimulus" when the country was on the verge of financial collapse, the Fed used its authority to start buying back bonds thus pumping billions of dollars back into the economy. The economy is now strong enough to do without this cash influx. The markets won't like when the interest rates are raised which must happen at some time. Banks can borrow from the government with zero interest practically and then loan it out for a large profit.

[SOTIRIOS]

.....over 70 Trillion of debt......

....does not seem 'on track' at all....except for collapse.....

[Pakboong]

I expect that a great deal of the funny money was used to prop up underfunded pension funds at all levels of govt.

[lovetotravel]

.....over 70 Trillion of debt......

....does not seem 'on track' at all....except for collapse.....

The US is nowhere near the worst country for debt:

http://www.businessinsider.com/g10-countries-by-total-debt-to-gdp-2011-12?IR=T&

[mania]

.....over 70 Trillion of debt......

....does not seem 'on track' at all....except for collapse.....

The US is nowhere near the worst country for debt:

http://www.businessinsider.com/g10-countries-by-total-debt-to-gdp-2011-12?IR=T&

That comparison is based on GDP to debt ratio which is pretty much meaningless when looking at debt

Better to just look at a countries debt vs their income period

The reason being & especially so in the case of the US is

that GDP includes government spending in its tally

GDP= Consumer spending + Government spending + Investment/business spending on capital+ exports - imports

I doubt many spend more especially for Military/wars funded & unfunded than the US + all this QE is considered govt spending/govt expenditures

So this makes GDP an extremely poor tool for comparison of debt afaik

So if one would want a picture of a countries financial health better to keep it simple

How much is their income? How much is their expenditures?

We all know how wild interest can get just on relatively small items like buying a home or car.

Against these trillions?

It moves so fast

http://www.usdebtclock.org/

Edited October 30, 2014 by mania

[dexterm]

There's a very good balanced analysis of QE at another BBC address

http://www.bbc.com/news/business-29778331

Has quantitative easing worked in the US?

..seems like the jury is still out. If you trade stocks, simply follow the price action.... let the big boys work it out...then jump on board. The trend is your friend ...up or down.

Edited October 30, 2014 by dexterm

[Publicus]

The POMO may have dried up, but the Plunge Protection Team still has a hand on the tiller...

Since the Fed was created in 1913 there have been one depression that it could do little to prevent (1929) instead on one every other generation and only a few recessions instead of one each decade and with unprecedented prosperity throughout. Without the Fed you would have got your wish in 2008-09 instead of the substantially recovered and transformative U.S. economy that is underway, so your fly by night hit and run remarks are anticipated. And they will continue to be anticipated as the United States continues to recreate and remake itself. Meanwhile, some fringe Mad Max economists will never change and I think of the Austrian school of 'em first and foremost, you know, the green eyeshade bookkeepers of the gold standard that carry on after the Austro-Hungarian empire that spilled over in to the 20th century was demolished by WWI along with a bunch of other post French Revolution empires.

.....over 70 Trillion of debt......

....does not seem 'on track' at all....except for collapse.....

The moonbeams are shinning down onto this thread as the usual suspects shuffle forward in the darkness to make their howling at the moon wild and unsupported pronouncements.

Edited October 30, 2014 by Publicus

[F430murci]

Dow up 236 today . . .