Stocks Buckle at the Knees on Growing Fear of a December Taper
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After trading higher, stock futures plunged lower on growing fear that the Fed's QE taper will be announced at the December meeting given the recent spate of positive economic data, including last Friday's better-than-expected non-farm payrolls.
The next FOMC meeting is scheduled December 17-18, 2013 and some now believe the Fed can't hold out any longer and will announce the move. Of course, the Fed could try to push off a taper announcement until the January 28-29, 2014 meeting, although this is growing increasingly unlikely.
Today's CNBC's Steve Liesman reported:
"While forecasting the central bank's moves has been an uncertain proposition for most of the past several months—with the conventional wisdom having it wrong in June and September—several of the Fed's own financial tests for reducing its asset purchases look to have been met as it heads into the Dec. 17 meeting. Those include confidence in the outlook, an easing of fiscal drag and uncertainty, and what the Fed sees as more appropriate interest rates.
To be sure, the Fed could decide to wait another month for even greater clarity, and practically, many Fed officials see little difference in a taper program that begins in December versus January.
But it looks as if the three tests for tapering have nearly been met."
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The next FOMC meeting is scheduled December 17-18, 2013 and some now believe the Fed can't hold out any longer and will announce the move. Of course, the Fed could try to push off a taper announcement until the January 28-29, 2014 meeting, although this is growing increasingly unlikely.
Today's CNBC's Steve Liesman reported:
"While forecasting the central bank's moves has been an uncertain proposition for most of the past several months—with the conventional wisdom having it wrong in June and September—several of the Fed's own financial tests for reducing its asset purchases look to have been met as it heads into the Dec. 17 meeting. Those include confidence in the outlook, an easing of fiscal drag and uncertainty, and what the Fed sees as more appropriate interest rates.
To be sure, the Fed could decide to wait another month for even greater clarity, and practically, many Fed officials see little difference in a taper program that begins in December versus January.
But it looks as if the three tests for tapering have nearly been met."
Read More
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