OUTLOOK: The world may not be ready yet to walk without central bankers' help
Jim Armitage is the City editor of The Independent and London Evening Standard group of newspapers. He has been a reporter and editor for more than 20 years and was recently shortlisted for the Press Gazette financial journalist of the year and The Society of Editors financial journalist of the year awards. He contributes news, investigative reports and comment to the Independent titles plus a daily column in the Evening Standard.
Thursday 19 December 2013
So, it's finally happened. The Fed's decision to slice $10bn (£6.1bn) a month off its quantitative easing programme is the clearest signal yet that Ben Bernanke, and his successor Janet Yellen, smell a real, full-blown recovery on the wind.
Meanwhile, back home in the UK, the jobless rate fell dramatically – close to the levels where Britain's answer to Ben and Janet, Mark Carney, has said he will consider ending our super-low interest rate environment.
The markets took both announcements in their stride. But worries should remain. We saw the chaotic impact that mere talk of QE tapering had on America's export markets in Asia and Latin America. Funds flew back to the US in the hope that the days of low returns in the West were over. Emerging markets were left facing suddenly high and destabilising borrowing costs.
Last night, the Fed watered down the impact of the taper with soothing words that it wasn't yet minded to consider raising interest rates.
But, as Ford had highlighted hours earlier with a profit warning over slowing exports, it doesn't take much of a global wobble to put the American economy back on the skids all over again. So, Mr Bernanke, Ms Yellen, and for that matter Mr Carney: cut QE further at the peril of all of us.
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