Tokyo, Japan -- (SBWIRE) -- 02/03/2014 -- According to Strategic Global Partners, after 8 years at the helm of the world’s most powerful central bank, Ben Bernanke conducted his final meeting as Chairman of the US Federal Reserve.
He presided over a rare unanimous vote to cut another $10bn per month off the amount of treasuries and mortgage-backed securities the Fed buys to stimulate the US economy.
“Mr Bernanke has steered the central bank through uncharted waters and is departing part way through an attempt to normalize monetary policy in the aftermath of what is still widely regarded as an extremely risky monetary experiment,” said a Strategic Global Partners researcher.
Since Mr. Bernanke began creating money buy US government debt and mortgage-backed assets in December 2008, the Fed’s balance sheet has quadrupled from $1 trillion to $4 trillion leaving the central bank as the largest holder of mortgages and behind only China and Japan as the largest holder of US sovereign debt.
US stock markets plunged on the news as investors weighed the effects of the taper on emerging market currencies which have lost significant ground to the US dollar since the fed announced its plan to end QE.
“There is also a sense that if the easy money from the Fed stops, there is little to justify what some refer to as ‘excessive valuations’ on US stocks,” said the Strategic Global Partners researcher.
Mr. Bernanke is to be replaced by Ms. Janet Yellen his former vice-chair at the Fed. Ms. Yellen is widely seen as being more dovish than Mr. Bernanke and more likely to halt or even reverse the taper if the US economy or the jobs recovery show signs of weakening.
About Strategic Global Partners
At Strategic Global Partners we work in conjunction with international private, corporate and institutional investors to provide them with comprehensive financial services, including portfolio management, investment research and trading facilities.
As your strategic advisor, it is our job to identify profitable investment opportunities while concurrently mitigating any risks, as we look to add value to your portfolio and make it more resilient against market volatility.
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