Shares soar on US Fed decision

The Dow Jones and Standard & Poor's 500 markets have closed at record highs after the US Federal Reserve decided to maintain its $85 billion economic stimulus package. Nasdaq is at its highest since September 2000.

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Markets shocked by continued Fed stimulus drive

The US Federal Reserve's announcement that it will maintain it current level of economic stimulus through quantitative easing (QE) shocked markets, which had widely expected it to begin cutting the $85 billion monthly bond package.

It was expected that QE would be reduced by $10 billion a month.

The announcement saw Sterling rise sharply higher against the dollar to 1.60 and the Dow Jones Industrial Average soared to an all-time high on Wall Street.

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US Federal Reserve decides not to cut stimulus

The US Federal Reserve has decided to maintain its vast economic stimulus package for the US economy, it announced defying expectations that the huge quantitative easing (QE) programme would be cut.

US Federal Reserve Board Chairman Ben Bernanke told reporters it would continue buying $85 billion in bonds, every month. Credit: Reuters/ Gary Cameron

The Federal Reserve said America is not yet ready to begin the process of weaning off its huge QE programme, as the recovery remains fragile, as it outlined plans to continue to pump $85 billion into the economy each month.

The Fed made the announcement following a two-day monetary policy meeting. It said it wants "more evidence" on growth and citied high unemployment rates and recent rises on interest rates on mortgages as reasons to keep the stimulus package in place.

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