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On 18th September, the Federal Reserve announced that it wasn’t about to start slowing its $85bn-a-month money printing habit? Why did the US central bank decide not to “taper”? The official line is that the Fed was worried about the impact of higher mortgage rates on the still-shaky US housing market. Fed Chairman Ben Bernanke also outlined his concern that the American labour market is weaker than it seems.

Another possible reason for the taper delay, one not cited by Bernanke, is that we’re in the “debt-ceiling season”, with Democrats and Republicans indulging in their seemingly annual game of posturing and buck-passing. Washington is playing chicken, once again, over the prospect of a US sovereign default.
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