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Summers exit prompts hopes QE tapering will be slow

by: Dan Jones
  • 16/09/2013
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Summers exit prompts hopes QE tapering will be slow
The FTSE 100 has jumped almost 1% after former US Treasury secretary Larry Summers withdrew his candidacy to replace Federal Reserve chair Ben Bernanke next year.

Summers (pictured), the favourite to replace Bernanke, exited the race last night after both economists and US senators said they would oppose his selection.

With investors having anticipated a faster withdrawal of monetary stimulus under Summers’ tenure, markets rallied in the hope of a slower withdrawal of QE next year.

In June, Bernanke’s announcement the central bank could scale back its programme of quantitative easing sent ripples through the money markets and triggered speculation that interest rates in the UK could rise

Janet Yellen, vice chair of the Fed board of governors, is now the frontrunner in the race to replace Bernanke on 31 January next year.

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