East Asia Updates-September 2017

Abstract

Basing its decision on solid job gains, a low unemployment rate, a moderate expansion of household spending, and a pickup in business fixed investment, the Federal Open Market Committee (FOMC) of the United States (US) maintained the interest rate paid on required and excess reserves at 1.25% and kept open the possibility of another rate increase later this year. The Committee also declared its intention to begin a balance sheet normalisation programme by decreasing the reinvestment of principal payments it receives from securities held starting next month. The interest rate hike and the Federal Reserve’s balance sheet normalisation programme would seem to suggest that the quantitative easing era in the US has come to and end.