Editorial: Ending the flow of ‘free money’ is fraught with risk

The US Federal Reserve is sending out signals that it intends to wind down quantitative easing, but it needs to proceed with caution, for many reasons

For the past 13 years, the Fed and other monetary authorities have been pumping money into the financial system at levels never seen before. Picture: Getty

Since the financial crisis of 2008-2010, when the world’s banking system teetered on the brink of collapse, the answer to every question about how to stabilise economies and markets was simple: “Call the Fed.”

The US Federal Reserve is the world’s most important central bank. Its every move, and every utterance by its chair – Jerome Powell is the incumbent – is followed, parsed and acted upon by investors, finance ministries, hedge funds, companies, and ...