Stocks risk harder drop if Fed hints at tapering
How Fed meeting could move stocks, bank shares, gold, Treasurys
http://www.marketwatch.com/story/stocks-risk-harder-drop-if-fed-hints-at-tapering-2013-03-17?link=MW_popular
Analysts say the central bank is wary of creating turmoil for markets,
and expect the Fed to largely stick to its script this week, which would
result in bond yields remaining in ranges and gold clinging to a recent
downtrend.
“The Fed understands this is a touchy subject...and at some point, they
have to put their foot off the gas. The key will be how they do it, how
they signal it,” said Matthew Tuttle, chief investment officer at Tuttle
Wealth Management LLC.
The Fed is prepping for a 2 day meeting where they are expected to keep interest rates at their already near zero level, they are also expected to continue their policy of buying mortage and treasury debt at 85 billion a month.
The market has been on a downward trend and any indication of change in policy would result in a further pullback in the market. The Fed is expected to make it's decision by 2pm eastern time this Wednesday.
At the most recent meeting in January, only one of the 12 officials wanted to put a halt to their policy buying. The rest felt it was necessary to continue to supplement the job recovery with bond purchases. I don't anticipate many changes after this meeting. The Fed has regretted taking their foot off the gas too soon in the past and I don't expect them to do the same this time around.
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