Federal Reserve policymakers are holding their two-day monthly meeting, with the financial markets focused on whether they will further scale back monetary stimulus.<br /><br />The feeling among economists is that the Fed will announce a further $10 billion cut in its bond buying at the end of the meeting.<br /><br />Last month they reduced the amount that is being pumped into the US economy from $85 billion to $75 billion a month.<br /><br />Outgoing Chairman Ben Bernanke has said the bond-buying programme is likely be completely wound down by later this year, as long as the US economy and labour market continue to improve.<br /><br />That thinking is not likely to change even in the face of a brutal sell off of emerging market assets in places like Turkey, Argentina and India.<br /><br />Though the central bank’s 16-month-old bond-buying is meant to boost the US economy, in the past it has lifted currencies and stocks in emerging markets that have benefited from a rush of international investment and the resulting lower interest rates.<br /><br />When the Fed signalled it intends to wind down the unprecedented policy accommodation, those markets – especially in countries with large current account deficits – dropped hard.
