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Fed decision: 'Just idea of tapering caused huge ruckus'

18 September 2013 Last updated at 11:37 BST

The US central bank is expected to announce on Wednesday a reduction in the amount of cheap money it pumps into the world's biggest economy.

Rabobank Senior Economist Jane Foley told BBC World that it would have been a difficult decision as the US labour market had not recovered, incomes were still squeezed and growth was "disappointing".

The Federal Reserve had already indicated it would gradually end its $85bn a month quantatative easing stimulus scheme and Ms Foley said it would lose credibility if it now did otherwise: "People are anticipating that they will [taper] but probably only going to dip their toe in".

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