The US central bank is winding down QE faster than planned – so why are markets bouncing?

The Federal Reserve is to speed up the pace at which it is winding down QE, its money-printing programme. But instead of going into shock, stockmarkets rose. John Stepek explains what's going on.

Jerome Powell
Jerome Powell: more hawkish than expected
(Image credit: © US Federal Reserve)

Last night, the Federal Reserve, America’s central bank, announced the results of its last interest-rate setting meeting of 2021.

Markets had been waiting with bated breath. The US central bank was expected to speed up “tapering” (ie, winding down its money printing). As it turned out, the Fed was even more “hawkish” than forecasts had suggested.

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John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.