The Dow Jones Industrials finished up 293 points or 1.8% at 16,168 and the S&P 500 finished at 1,811, up 1.68% on the day as the FOMC (Federal Open Market Committee) of the Federal Reserve surprised markets and announced an early start to tapering of the $85 million a month programme of bond buying beginning in January. The Federal Reserve has spent trillions since the 2008/2009 financial crisis and its balance sheet now stands at around $4 trillion.
The early finish to the Fed’s quantitative easing programme was interpreted by the markets as showing greater confidence in the potential strength of the U.S. economy next year. So unexpectedly, the markets have shot up on the announcement, interpreting Ben Bernanke’s positive take on the American Economy as evidence that greater growth is around the corner.
As well as signalling that interest rates would remain near zero potentially for years, the Fed’s asset purchases of Treasury’s and mortgage-backed securities will drop to $75 billion from $85 billion a month with an expectation that QE will come to an end late in 2014.
Contrarian Investor UK
IMPORTANT
The posts I make are in no way meant as investment suggestions or recommendations to any visitors to the site. They are simply my views, personal reflections and analysis on the markets. Anyone who wishes to spread bet or buy stocks should rely on their own due diligence and common sense before placing any spread trade.
by contrarianuk
US markets rise to record high as Fed announces early start to tapering
Dec 18, 2013 at 9:27 pm in Market Commentary by contrarianuk
The Dow Jones Industrials finished up 293 points or 1.8% at 16,168 and the S&P 500 finished at 1,811, up 1.68% on the day as the FOMC (Federal Open Market Committee) of the Federal Reserve surprised markets and announced an early start to tapering of the $85 million a month programme of bond buying beginning in January. The Federal Reserve has spent trillions since the 2008/2009 financial crisis and its balance sheet now stands at around $4 trillion.
The early finish to the Fed’s quantitative easing programme was interpreted by the markets as showing greater confidence in the potential strength of the U.S. economy next year. So unexpectedly, the markets have shot up on the announcement, interpreting Ben Bernanke’s positive take on the American Economy as evidence that greater growth is around the corner.
As well as signalling that interest rates would remain near zero potentially for years, the Fed’s asset purchases of Treasury’s and mortgage-backed securities will drop to $75 billion from $85 billion a month with an expectation that QE will come to an end late in 2014.
Contrarian Investor UK
IMPORTANT
The posts I make are in no way meant as investment suggestions or recommendations to any visitors to the site. They are simply my views, personal reflections and analysis on the markets. Anyone who wishes to spread bet or buy stocks should rely on their own due diligence and common sense before placing any spread trade.