Not so long ago, the Fed's FOMC deiced to continue tapering the QE. In particular, the committee decided to cut the bond purchases from $65bn a month down to $55bn a month. The politicians ignored the level of unemployment as well.
At the same time, Janet Yellen made a speech following the FOMC meeting. During the speech, she hinted at the possibility of interest rate hikes in early 2015 if there are favorable conditions for that.
As you can see, the first FOMC meeting under Janet Yellen's presidency ended up with the decision to continue tapering the QE program. By the way, this is the 3rd time, the Fed has cut the amount of bond purchases by $10bn a month. The decision came as the result of the open voting that took place during the meeting. 8 out 9 FOMC members supported the tapering.
At the same time, there are new predictions for the US economic growth in 2014 These predictions are lower than the preceding ones. In particular, the Fed expects the US GDP to grow only 3% this year instead of 3,2% expected previously. The Fed's forecasts for 2015 and 2016 were downgraded as well - 3.4% down to 3.2% and 3.2% down to 3% respectively.
It should be noted that there is no surprise in the fact that the Fed deiced to ignore the existing level of unemployment and to continue the QE tapering process. Still, the most interesting information is that Janet Yellen is planning to start raising interest rates within 6 month after QE3 is finally over.
Judging by the current forecasts, the QE program may be finally tapered this fall, probably in October-November 2014.
Meanwhile, the US Dollar is strengthening on the information about futher QE tapering. Indeed, when the Fed cuts down on QE, the US Dollar gets stronger, Masterforex-V Academy reports. The next big level of resistance is 80,280. If the price breaks and consolidates above it, we may see the Dollar reaching further highs in the near future.
