Fed: Small Taper

December 18th, 2013
in econ_news, syndication

Econintersect:  The Federal Reserve Board of Governors has announced that a taper of $5 billion per month for each Treasury securities and MBS (mortgage backed securities).  The new monthly purchases will be $40 billion for Treasuries and $35 for MBS.


Follow up:

Immediate responses were a sharp drop in gold, a spike in the dollar index, a reflexive drop and then a significant rise in U.S. stocks and a modest rise in long-term Treasury interest rates.

By the time the market closed stocks were much higher into new record levels while interest rates, gold and oil were little changed.  Volatility dropped and the dollar strengthened.

See Gary's Market Close report for more on investor reaction.

Details regarding the Fed announcement press release have been posted later.

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