Flash: QE tapering still unfinished business – Investec

FXstreet.com (New York) - Bernanke’s June FOMC post meeting press conference caused a wave of market panic about the Fed’s apparent move to the policy exit, notes Corporate Treasury Lee McDarby at Investec.

Key quotes

“Since then the Fed has been on a communication quest to highlight its views on winding down QE3 purchases whilst seeking not to raise expectations that a sharp ‘normalization’ in rates is around the corner.”

“We see the Fed as broadly genuine in this message with rates unlikely to be lifted before early-2015 and then only very gradually. Indeed the recent taster of Fed exit fears and its impact on the recovery is evident in the rise in Treasury yields post-June FOMC meeting, lifting mortgage refinancing rates, threatening the housing recovery in its tracks.”