Daily Archives: September 22, 2013

The US Federal Reserve’s decision last week to delay the start of its so-called “tapering” has confused investors about the reliability of its forward guidance. It has also created a trap that will make it difficult to start the tapering programme in the future unless the Fed changes its basic approach.

More specifically, Ben Bernanke, the Fed chair, explained that the Federal Open Market Committee (FOMC) had decided not to reduce its pace of bond-buying because current economic conditions were not as favourable as the FOMC members had expected in June. Looking ahead, he said the Fed could begin tapering later this year “if the data confirm our basic outlook”. Read more

As the Labour party gathers for its conference in Brighton, its leader, Ed Miliband, faces a more aggressive Conservative party that is getting its act together. David Cameron’s strategists have launched what will be a relentless campaign to persuade voters that, despite all the pain and hardship of the austerity years, “hard-working families” can now enjoy lower income tax and a smaller public deficit with less welfare spending, crime and immigration. Labour’s task is to dispute these claims but, above all, offer better policies in their place.

Mr Miliband has laid important foundations for his campaign. He has recalibrated Labour’s position on public spending, welfare and immigration, aligning his approach with economic reality and popular opinion. He has ensured that Labour’s door remains open to working with the Liberal Democrats, despite the short-sighted attacks made by some in the party. Above all, he has not allowed his party its habitual descent into factional war following election defeat. With the quiescence of the New Labourites he disowned during his leadership campaign, the party has chosen to close ranks behind him. Read more