Taper surprise: US stocks jump as Fed scales back QE

US markets soared to new all-time highs on Wednesday as the Federal Reserve made a surprise early move to gradually scale back quantitative easing.

The Federal Reserve will reduce its asset purchase programme by $10bn per month from January 2014, taking it from $85bn to $75bn. It will scale back its treasury purchases by $5bn to $40bn a month, and its mortgage-backed securities purchases by $5bn to $35bn a month. The move to gradually scale back the stimulus measures indicate the central bank's confidence in the improving US economy. However, it also reaffirmed its commitment to low interest rates, saying interest rates are likely to stay close to zero “well past the time that the unemployment rate declines below 6.5%", as lon...