Fed seems to have learned from infamous 2013 taper tantrum

THE US Federal Reserve ripped the plaster off on Wednesday, confronting markets with pain long seen as inevitable, and replacing a sense of anxiety with a sense of relief.

In its latest policy statement, the Fed said it may begin "tapering" bond purchases as soon as its next meeting on Nov 2 and hike interest rates as soon as next year, in a clear signal that the retreat from costly pandemic-era stimulus programmes had begun.

Various strategists said that the central bank had learned from the infamous "taper tantrum" of 2013, when a similar signal caused a market correction by carefully foreshadowing Wednesday's decision.