Dr Chris Caton, Chief Economist for BT Financial Group, discusses his outlook for the US and Chinese economy - the two major influences on the Australian economy. According to Caton, investors should not expect a big market reaction in the aftermath of the Fed's QE program. As far as markets are concerned, QE has already ended, they have already factored in a response, says Caton. On the topic of China, Caton notes how demand for iron ore has pushed up commodity prices and fuelled Australia's mining capex boom. As China adapts to a slower annual growth rate of 7% and the mining capex boom peaks, Australia must adjust to a period of transitioning growth. What's going to replace the mining capex as source of growth? The answer is, no one thing, but everything stimulated by low interest rates, a lower exchange rate and surging business confidence, says Caton.