Fed 8216 could start scaling back stimulus 8217

The Federal Reserve announced last night (June 20th) that it could soon be ready to start cutting its asset purchasing programme in the US.

Chairman of the body Ben Bernanke revealed in a press conference that interest rates are to be kept at a record low range of between zero and 0.25 per cent.

He stated asset purchases could begin being slowed by the end of 2013 and wound down completely by the middle of 2014, as long as the Fed's projections for the US economy are right.

"We have no deterministic or fixed plan," Mr Bernanke told reporters at the press conference.

Speaking to BBC News, global equity strategist at Standard & Poor's in New York Alec Young noted it is clear the "unprecedented stimulus" in the US is coming towards an end.

"They have increased at the margin their outlook for the economy," he was quoted as saying.

On the back of the news, the Nikkei index dropped by 1.7 per cent, cancelling out some of the gains it made earlier in the week.

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