Wednesday, Jun 3, 2015Wednesday, Jun 3, 2015

US to start withdrawing stimulus in September: Nomura

Published on Jun 10, 2013 7:18 PM

A surprisingly strong performance from the labour market was the main reason why the United States Federal Reserve probably decided that it was time to start slowing down the pace of its monetary stimulus, economists from Nomura Bank said here on Monday.

They expect the Fed to start "tapering" its quanitative easing programme as early as September and latest by the end of the year, as economic indicators continue to point upwards.

In a report last month, the US Fed chairman Ben Bernanke and minutes from the Fed's meeting raised concerns that the Fed could slow down its monetary stimulus programme soon, which currently buys about US$85 billion (S$106 billion) of commercial debt a month.

That caused a spike in volatility in stock markets around the world, as fears mounted that the liqudity-fueled rally could come to a halt.

Enjoy 2 weeks of unlimited digital access to The Straits Times. Get your free access now!