AI
Wednesday, February 05, 2014 4:13:42 PM
Wall Street Finally Realizes the Taper Is for Real
So the Federal Reserve is doing exactly what it said it would do, sticking to the plan of reducing the amount of bonds it buys by about $10 billion a month. That puts its monthly purchases of U.S. Treasuries and mortgage-backed securities at $65 billion, down from the rate of $85 billion it kept through most of 2013.
For two straight months the Fed has announced a reduction in its massive, five-year quantitative easing policy. It’s fair to say that the dreaded taper is now in full-swing. At this pace, the program will end before the year is up. The U.S. economy and, more importantly, the stock market will have to stand on their own. Apparently, after more than a year of speculation, someone just told Wall Street.
Wednesday’s announcement from the Federal Open Market Committee kicked what was already a pretty steep stock market selloff into high gear. By 3:30 p.m., the Dow Jones Industrial Average was off more than 1 percent, having shed nearly 200 points. It finished with a slight rally that limited the day’s damage to a 189-point loss.
http://www.businessweek.com/articles/2014-01-29/wall-street-finally-realizes-the-taper-is-for-real
So the Federal Reserve is doing exactly what it said it would do, sticking to the plan of reducing the amount of bonds it buys by about $10 billion a month. That puts its monthly purchases of U.S. Treasuries and mortgage-backed securities at $65 billion, down from the rate of $85 billion it kept through most of 2013.
For two straight months the Fed has announced a reduction in its massive, five-year quantitative easing policy. It’s fair to say that the dreaded taper is now in full-swing. At this pace, the program will end before the year is up. The U.S. economy and, more importantly, the stock market will have to stand on their own. Apparently, after more than a year of speculation, someone just told Wall Street.
Wednesday’s announcement from the Federal Open Market Committee kicked what was already a pretty steep stock market selloff into high gear. By 3:30 p.m., the Dow Jones Industrial Average was off more than 1 percent, having shed nearly 200 points. It finished with a slight rally that limited the day’s damage to a 189-point loss.
http://www.businessweek.com/articles/2014-01-29/wall-street-finally-realizes-the-taper-is-for-real
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