Federal Reserve Open Market Committee (FOMC) meeting which was held during 17th and 18th of September, after conclusion, desisted from reducing the pace of the monthly bond purchases. Fed was likely to reduce its US $ 85 billion asset purchases. The ‘Septaper’ has backed up its stimulus program. The reasons behind this backed up of the QE program was the insufficient data supporting the US economy. Though the data showed the positive impact, they were not much supportive to implement the tapering stimulus.

The copper, gold and oil prices showed a gain against this Fed’s move. The gold, regarded as the hedge against inflation which had rallied up into the bearish market since April, has entered into a bullish trend soaring up by about 4%. WTI’s price too went up against the Fed’s decision by 2.5% whereas copper future jumped by 2.8%. The US Dollar per EUR which had reached to 1.31075 has slid up to 1.35290 thus depreciating by 3.2% and appreciating other currencies. The INR per USD which had reached to its all time low to 68.86 on August 28 has revived back and reached to 61.77 on 19th September at 5:10 UTC after remaining at 63.59 at 1:40 UTC. The INR had appreciated by about 2.7%.

The central bank left unchanged its outlook that its target interest rate will remain near zero unless the unemployment exceeds 6.5 percent, as long as inflation does not threaten to go above 2.5 percent In the current 4th quarterly forecasts, the Fed cut its forecast for 2013 economic growth to a 2-2.3% from a June estimate of 2.3- 2.6%. The forecast for 2014 was even sharper. Fed Chairman Ben S. Bernanke reported that Fed would halt the taper till this year and would only start unless it is supported by strong economic outlook.

The investors were expecting the Fed’s tapering whereas they were confronted to their expectations. The emerging markets mostly the Asian economies took long breathe of relief which had suffered the most as the investors were attracted to US for higher yields. Indian rupee and Indonesian rupiah appreciated from a historic depreciation. Similarly, Thai baht, Malaysian ringgit and Singapore dollar all traded high over in the market.

Though the Fed’s ‘no taper’ has disguised the investors, the Asian economies did benefit by it and the commodity prices which has strained down during the past week has gained some momentum with the rise in prices. Yet, the tapering is to happen; the short period of postponement has given relief to the bearish commodity market.