Assessment: The Fed was cautious with minimal cuts to Treasury purchases (QE). Keep in mind that the fear and greed index favors the 1% getting richer …
The dollar plunged and stocks soared after The Fed unveiled its taper and raised concerns about the transitory nature of inflation, prompting the market to send rate-hike odds notably higher (and sooner).
” … and do not harm the oil and the wine.” Rev. 6:6
But Curvature notes:
“The tapering announcement was generally as expected, but at the same time, a little different. Yes, the FOMC announced the Fed will purchase $15 billion fewer securities beginning in November. Basically, as expected.
However, here’s the interesting part. The Fed pre-announced a second tapering of $15 billion in December. That means that beginning in January, tapering is still a “wild card.” We will expect another cutback of $15 billion in January, however, it’s not guaranteed.
Theoretically, they could stop tapering in January or they could increase the pace of tapering.
Overall, it looks like the December FOMC meeting will be important for the markets”
Market reactions sent mixed messages:
- Dovish: USD down, Stocks up, Breakevens higher.
- Hawkish: Implied rate-hike odds up, TSY yields up, gold down, oil down
- And crypto was up – is that dovish or hawkish (they’re gonna hike, break the world, and resume QE to save us all again?) Read More
