The collective holding of breath is almost over ahead of the Federal Reserve speech by Ben Bernanke at 7pm (London time). After his last speech, the mere suggested possibility of a reduction in quantitative easing meant that the FTSE, amongst many equity indices around the globe, spent the next three weeks giving bake ground.
The self-imposed targets that the Fed set were for unemployment levels to fall to 6.5% and inflation to 2%. In both cases the US is still some way away; however they are much further down the road of recovery that they were before. The fact that they are asking themselves when, and not if, they can start to reduce the QE process highlights that, regardless of how fragile they are, they are indeed beginning to see an economic recovery.
In his closing days as the governor of the Bank of England Sir Mervyn King has reiterated his opinion that a recovery of the UK economy is within sight. Of course it is worth noting that he was one of the nine who at the last BoE meeting voted for further QE.