Fed holds rates, but signals tapering in near-term

Whilst keeping interest rates at historic lows, the US Federal Reserve has signaled it is likely to announce tapering of its bond purchases in the coming months, much in line with market expectations. The US central bank has also indicated there may be interest rate hikes sooner than was previously thought, with some FOMC members flagging the first rate hike in 2022, though the timing of `lift off` is still being seen by most Fed members as occurring in 2023. Strong employment numbers, the continued economic recovery and inflation running around 3-4% are behind the sentiments, though markets have reacted positively showing that there were no material surprises from this Fed announcement. US government debt was little changed, while US equities rallied after a notable risk-off sentiment earlier in the week stemming from worries over the stability of China's debt-laden property companies such as .