Fed makes room for RBI

Given the steady improvement in US data, from GDP to employment, the Fed not starting its taper was a surprise, one possibility is Ben Bernanke may have thought it better to leave such a decision to his successor who, if it is Janet Yellen that gets the job, could be more dovish. Equally, when there is uncertainty over how the talks on the budget and the debt ceiling will work out between the Democrats and the Republicans, the Fed didn’t want to take a chance withdrawing stimulus by way of low interest rates.

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