US end of stimulus
The Federal Reserve of the United States (FED) maintained on Wednesday its interest rates at the time that announced the end of the era of economic stimuli initiated after the crisis of 2008.
Exceptional monetary measures, such as the purchase of assets, known as QE (quantitative easing), were adopted by the Fed to give oxygen to the world’s largest economy after the 2008 crisis.
The Fed, in addition, did not change its interest rates and kept them between 1% and 1.25%, says the FOMC statement; the monetary policy committee of the Federal Reserve.
The entity will begin to gradually reduce its balance sheet that has reached a historical record of 4.5 trillion dollars in assets such as Treasury bonds and securities supported by mortgage loans.
The decision of the FED implies that, at the moment, it will let reinvest in new assets what it gains with those values.
The divestment rate will be of 10,000 million dollars monthly for three months and then it will be 10,000 million dollars every three months.
These reductions operate in fact as a slight tightening of monetary policy.
The Fed wants the process to be gradual and predictable in order to avoid eventual shocks to the markets, as happened in 2013 when it announced a reduction in its purchases of assets.