FTSE drops on fresh Fed QE concerns

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The FTSE 100 retreated in early trading this morning after fresh concerns emerged that the US Federal Reserve will start to slow its bond-buying efforts.

As of 09:53 BST, the blue-chip index was down 34.25 points to sit at 6,524.33. The index has handed back all of the gains made in yesterday’s session but is still up more than 10 per cent over the year to date.

The fall was prompted by comments last night from Federal Reserve Bank of Dallas president Richard Fisher, who call for a reduction in the central bank’s $85bn-a-month quantitative easing scheme.

Fisher said it would be “prudent” to scale back the purchases after calling the end of the 30-year bull market in bonds.

“It would be prudent to dial back the rate of purchases we are making in mortgage-backed securities [given that] the housing market is in a good state, construction has started again, housing prices are appreciating significantly,” the banker added.

Meanwhile, Kansas City Fed president Esther George suggested that slowing the pace of bond-buying would to reduce the financial markets off dependence on their ultra-loose monetary policy.

Aberdeen Asset Management was the largest faller on the FTSE as of 09:53 BST, shedding 4.3 per cent to hit 443.9p, followed by National Grid, Tesco, Evraz and Anglo American.