The Federal Reserve is taking its time to taper The Federal Reserve's surprise decision to stick with its $85bn-a-month quantitative easing programme indicates that monetary policymakers in Washington are far from convinced by the incipient US recovery. An unemployment rate of 7.3 per cent, while much improved, is still considered to be too high. Indeed, so uncertain are Federal Open Market Committee rate-setters, they downgraded growth forecasts for this year and next. Far from baulking at the downbeat assessment, however, investors made whoopee from Tokyo to London. Their relief is not entirely irrational. The implications of Ben Bernanke's June suggestion that the Fed would start "tapering" its stimulatory bond-buying some time before the end of year were felt around the world. Emerging economies, particularly in Asia, saw their currencies plummet as money was pulled out in favour of newly rising (and much safer) US markets. Nor was the developed world any more insulated. Even though the Fed has not yet done anything, just the prospect of a half-turn on the taps has sent long-term interest rates sharply upwards in anticipation. There are two lessons here. One is that, for all the new-found economic optimism, what green shoots there are - both here and elsewhere in the world - are still about as fragile as they can be. The second is that the route from where we are now back to unstimulated, pre-crisis normality will be a bumpy one.