When will the Fed take the punch bowl away?

By Money Matters Editors

In the months and quarters ahead, the U.S. Federal Reserve will face, arguably, its biggest decision in the modern era - certainly its biggest choice since the early 1980s, and possibly since the 1930s. Namely - when to start to withdraw quantitative easing - cash injections that provided essential liquidity to markets to end the financial crisis.

If the Fed withdraws funds too late, it runs the risk of increasing inflation - and some say increasing it to a very high rate - like the double-digit rates last seen in the early 1980s.