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FTSE opens 1.2% ahead after Fed stands by QE

Stock-Market-FTSE-Stockmarket-700x450.jpg

Stocks have risen after the minutes of the Federal Reserve’s latest monetary policy meeting showed it plans to keep stimulus measures in place for the foreseeable future.

Although “about half” of the Fed’s 19-strong Federal Open Market Committee think its $85bn-a-month quantitative easing programme could be phased out by the end of the year, the committee wants to see further evidence of recovery in the jobs markets before embarking on tapering.

The FTSE 100 opened ahead on the back of the news, gaining 76.93 points or 1.18 per cent to hit 6,581.89 by 0820 BST. Fresnillo, Associated British Foods, Anglo American, Antofagasta and Rio Tinto were the strongest risers straight after opening.

Markets in Asia have closed up while early gains are being seen in Europe.

The FOMC’s minutes says: “All members but one judged that the outlook for economic activity and inflation warranted the continuation of the committee’s current highly accommodative stance of monetary policy in order to foster a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability.”

Markets have been watching the central bank’s moves closely since 22 May, when Fed chairman Ben Bernanke said it would consider slowing the pace of QE if the US economy continued to strengthen as expected.

Speaking to reporters after the minutes were published last night, Bernanke said: “High accommodative monetary policy for the foreseeable future is what’s needed in the US economy.”

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