Option for 2013 taper left open by Fed minutes

THE RATE-setting Federal Open Market Committee left the possibility of tapering quantitative easing (QE) as soon as December on the table in its last meeting, according to minutes released yesterday.

The US Fed’s FOMC said that continued improvements to the US job market would “warrant trimming the pace of purchases in coming months,” suggesting that the reduction in monthly asset purchases might come in December or early next year, mentioning the “next few meetings” specifically.

The committee agreed that the economy was continuing to pick up “at a moderate pace,” adding that markets had not expected the Fed to hold its monthly $85bn (£52.64bn) bond-buying programme steady in September.

The president of the St Louis Fed, James Bullard, confirmed the possibility of a December taper, saying the move is “definitely on the table,” adding: “A strong jobs report...would increase the probability some for a December taper.” US consumer price inflation, also announced yesterday, came in at just one per cent for October, the lowest level since 2009.