Global Weekly: Markets surprised by the Fed

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Central banks are stuck between strong growth and low inflation. At its September meeting, however, the US Federal Reserve seemed to remain confident. China was downgraded one notch by rating agency S&P.

Macro update

At its September meeting on Wednesday, the US Federal Reserve (Fed) decided to start reducing its balance sheet in October by gradually tapering the re-investment of maturing assets. The Fed had already published a detailed strategy of how it would do this in June. This schedule implies that the balance sheet will shrink by over USD 400 billion by the end of next year. The decision to start the process next month and the strategy were in line with expectations.

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