When we met with the Committee just prior to Christmas, I suggested that, taking an international view, 2013 could be described as a year that turned out not to be quite as good as hoped for, but not as bad as feared. Nothing that has occurred in the period since then would change that assessment.
One prominent international event was that, within hours of that hearing, the US Federal Reserve commenced the “tapering” of its monthly asset purchases. This was a possibility we talked about at the time and, although the timing of it wasn’t known, it was considered likely that it would begin before long. A further reduction in asset purchases was decided at the Fed’s January meeting.