Ben BernankeFed chairman Ben Bernanke said: “We’re seeing encouraging numbers in terms of household spending – for example, auto purchases – fiscal drag is reduced, and there are stronger numbers internationally.

“Recent economic indicators have increased our confidence that the job market gains will continue.”

After five years of stimulus the FED finally feels that the recovery is sufficently embedded to begin to take the patient off life support. We are now on a reducing intravenous drip, but at least the patient is recovering and the prognosis is good.

Markets have reacted well after an earlier scare triggered by hints of a complete withdrawal of QE. This time around the patient has been taken off life support but is still on an intravenouls drip, and the shock of cold turkey has been avoided. The charts tell the story:

Finance charts


Asia and Europe are also reacting positively.

The final FED meeting saw Ben Bernanke step down with something of a flourish. He has had his critics but given the unprecedented financial turmoil in his years in charge he has done a pretty good job in my book. The US regulatory response to the crisis was faster and action on the US banking system more surefooted than in Europe. His successor Janet Yellen has been on the team throughout and we can expect a smooth handover. The mark of any good leader is to deliver consistently and to ensure good succession. After 8 years at the helm of the most influential financial institution on the planet Bernanke scores well on both counts.