Minutes from the Federal Open Market Committee’s latest policy meeting, released early Wednesday afternoon, shook stock and bond prices as the central bank indicated it might taper its bond-buying stimulus in the coming months.
After rising early in the session, the major stock averages reversed course after the Fed minutes showed policy-makers had agreed that “if economic conditions warranted, the Committee could decide to slow the pace of purchases at one of its next few meetings.”
“The minutes pointed more toward an expectation of tapering than the market expected, so that’s what turned it around,” said Bob Iaccino, chief market strategist at TopstepTrader in Chicago...
Heidi Learner, chief economist at Studley’s in New York, said she was not surprised by the FOMC minutes given the economy’s “steady-state recovery.”
“If it continues to proceed as planned, I don’t see why the Fed wouldn’t slowly remove accommodation via a reduction in asset purchases,” Learner said. “It could be a trivial reduction; they’re not on a set timetable...”
“I think the economy is going to continue to improve,” said Learner. “That’s what we saw in the retail sales data this morning and with some of the other numbers, including the increase in housing prices, a slow but study adjustment process.”Stocks reverse gains after FOMC minutes suggest early Fed taper
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