Pace of tapering could impact long-term interest rates

The pace of tapering for quantitative easing in the United States could easily impact the environment for long-term interest rates and the market for gold.

As a result of the connection between the future reduction of this stimulus, these rates, and also the market for the commodity, those who engage in precious metals investing might benefit from scrutinizing any future changes.

The central bank has been purchasing $85 billion worth of debt-based assets every month since late in 2012. The Fed has bought securities in three separate phases in an effort to bolster the money supply, and as a result its balance sheet has surged to $3.66 trillion, according to Bloomberg.

Market participants across the world are currently waiting to hear the outcome of the Fed’s policy meeting that is scheduled to end on September 18, The Wall Street Journal reported. Many have predicted that at the conclusion of this gathering, a reduction to the Fed’s stimulus will be announced.

One market expert who stated this belief is Rick Rieder, who works in New York as co-head for the Americas fixed income at BlackRock Inc., according to Bloomberg. He has predicted that the pace of QE will be lowered by between $10 billion and $15 billion as a result of the Fed meeting. 

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