Home ›› 05 Nov 2021 ›› Stock
Global stock markets advanced Thursday after the Federal Reserve said it would this month start tapering its pandemic support programme.
London equities also pushed ahead before an interest rate decision from the Bank of England at 1200 GMT, with economists predicting a close call over a possible hike to borrowing costs despite soaring inflation.
The dollar traded mixed while the pound wavered.
Oil rebounded from recent losses, with traders awaiting an output gathering of OPEC and other key producers.
The Fed on Wednesday said it would start reducing the monthly pace of quantitative easing (QE) stimulus purchases by $10 billion for Treasuries and $5 billion for mortgage-backed securities.
The announcement fuelled another record rally on Wall Street, and bumper gains across Asia.
The US central bank added it would be patient in hiking interest rates as the world’s biggest economy continues to recover, insisting once more that surging inflation was transitory.
Tapering ‘surprised no one’
“This QE tapering has been very well communicated and surprised no one,” SEB chief economist Jens Magnusson told AFP.
“There was a fear that the $15 billion decrease per month could have been $20 billion or $25 billion, and there was also a risk of a more hawkish rate message.
“As it turned out, everything was in line with expectations with no scary surprises and sometimes that’s all it takes for stock markets to be happy.”
The announcement brought to an end months of speculation about the bank’s plan for the bond-buying programme, and removed some unease among traders who were concerned that officials were leaving it too late to respond to rocketing inflation.
