What's going on?

The US Federal Reserve (the Fed) announced late on Wednesday that it�d start slowing its bond-buying from November, finally giving investors something to sink their teeth into.

What does this mean?

The Fed�s been working hard to keep the US economy grinding along during the pandemic, not least by buying up $120 billion worth of bonds every month � lowering their yields and, in turn, borrowing costs for households and companies alike. But now that the country�s started to look a little steadier on its feet, the Fed�s decided to start winding that bond-buying program down as soon as November. The central bank said it�ll end the program altogether from the middle of next year, and then � and only then � will get to thinking about upping interest rates�

Why should I care?

For markets: The Fed gives a stay of execution.
Interest rate hikes matter because they make a company�s future earnings worth less today, which could give investors� stocks a knock. But it�s no secret that they�re on their way: it�s just been hard to know when exactly. So now that the Fed�s said nothing will happen until at least the middle of next year, investors can relax a little. Throw in the fact that the central bank just upped its expectations for US economic growth over the next two years, and it�s no surprise US stocks rallied after the news.

The bigger picture: So much for a blip.
The Bank of England (BoE) made its own announcement on Thursday, saying inflation might stay above 4% well into next year. This, despite having maintained for a while now that this spike in prices is only temporary. The BoE is sticking to its guns, mind you: it�s still not raising rates quite yet, even if it did say it�d think about doing it in the next few months � so long as the UK�s recovery stays on track, of course.