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Ben Bernanke can look back on his work yesterday with a degree of satisfaction. The excitement last night might pale into insignificance when compared with the situation at Trent Bridge, but it was still an impressive performance.
Fears of tapering are being tapered themselves as Bernanke seemed to come down in favour of additional easing, dispelling the impression that the Federal Reserve would look to tighten their monetary policy in the autumn.
However, I would point out that the voting composition of the Federal Open Market Committee changes at the beginning of next year, with more hawkish members gaining the ability to vote in decisions; thus, we should not be too blasé about the outlook for Fed policy. Tapering of some sort is on its way, but what is unlikely to change is the commitment to keeping interest rates at record lows for extended periods.
We have had little major news this morning in London, but markets have slipped back from their highs with the FTSE 100 now up 40 points at 6546, off 40 points from the level seen in the immediate aftermath of the opening bell. Given the size of the move from June lows, some of the fizz may leave markets over the next few sessions, but the push higher will be likely to resume before long.