Bernanke banked out and the rupee recovered. Unemployment figures were bad and market sentiments seemed shaken from two government shutdowns. It recovered, albeit tentatively at first, only after Bernanke changed his mind last September saying the economy was not strong enough to be left to grow on its own. Talk of an impending taper - a term used to describe the gradual winding down of the the Fed’s Easy Money policy (also called Quantitative Easing) - had wrecked the rupee last summer. Starting February, the Fed’s monthly purchase of mortgage-backed securities will drop to $30 billion from $35 billion, and longer-term Treasury securities $35 billion from $40 billion. "In light of the cumulative progress toward maximum employment and the improvement in the outlook for labor market conditions, the Committee decided to make a further measured reduction in the pace of its asset purchases," the Fed said in a statement. It was cut by $10 billion in January, and now another $10 billion, as expected. The Fed bought bonds worth $85 billion a month to boost the economy till December, 2013. The cut was announced after a two-day meeting of the Federal Reserve’s top policy making committee, which was also the last to be called by departing chairman Ben Bernanke. The current deficit, for one, is in a much better shape today. Indian markets and currency will be impacted but officials and market analysts said it won’t be as bad as before. Stay tuned with breaking news on HT Channel on Facebook.
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