Sharemarkets could be in for a rocky few days after the United States Federal Reserve stepped in yesterday to try and drive down debt and boost economic growth.
Futures markets dropped sharply on the news before making a recovery later in the day.
When the futures markets fall, that usually indicates major share indices around the world follow that lead.
The Fed said it would spend a relatively small amount of money - about $US10 billion ($NZ13.8 billion) a month - buying government debt.
Forsyth Barr broker Peter Young said the move was designed to drive interest rates on mortgages and corporate borrowing lower and help the economy grow faster.
The decision to buy government debt, using proceeds from Fed investments in mortgage bonds, was a shift from earlier in the year when the Fed was laying out plans to roll back some of the measures it took during the financial crisis.
At that time, the Fed was preparing to raise interest rates, a step taken to keep a growing economy from overheating.
Now, it has decided to keep its benchmark interest rate at 0% to 0.25%, he said.
"If it helps lower mortgage rates, or keep them lower than they otherwise would be, this would be a plus for the housing market and the economy as a whole."
It was the first time for a year the Fed had attempted to bolster the economy, he said.
Household spending was now seen as increasing "gradually" and business spending was only "rising" after being described as "rising significantly" in June.
The Dow Jones futures market dropped 75 points immediately after the announcement but during the day recovered some ground to be down about 58 points when the NZX closed at 5pm.
Mr Young said as the information was digested, investors would weigh up their options about the Fed's moves to boost the economy.
"Investors might think these underlying things will come back to bite in the future if the Fed is looking at them now."
Sharemarkets around the world started reacting yesterday afternoon with Chinese share prices sustaining their worst fall in more than a month, dragging markets down across Asia.
European stocks also retreated, responding to the nervousness felt after the Fed's announcement.
