Deloitte Monday Briefing: Not Quite Ready To Say Goodbye To QE

Last month the US Federal Reserve's Chairman sent a shock wave through equity markets by suggesting the Fed might slow its programme of Quantitative Easing. Equities and bonds markets took a knock, with Japan's Nikkei index dropping by over 6.0% in one day.

Mr Bernanke's comments provide a dress rehearsal for how markets could react when the world's central banks halt their programmes of Quantitative Easing (QE).

Over the last five years central bank QE has pumped trillions of dollars into the global economy. By buying up government bonds, QE has pushed up their price (and reduced their yield or interest rates). And by releasing liquidity into the economy QE also seems to have boosted equity prices.