Stocks Weaker, Treasuries Up On More Double Dip Fears after Fed's 'QE-Light'
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Stocks are under heavy pressure today, a day after the the Federal Reserve changed its strategy to maintain the size of its balance sheet - instead of shrinking it - by buying U.S. treasuries. Some are calling this Fed action 'QE Light'.
After digesting the news, investors may feel the ratcheted-down economic outlook at the Fed is more worrisome than the new quantitative easing measures. Double-dip recession fears are back in the forefront.
The Dow is down 218, the Nasdaq is down 63 and the S&P 500 is down 26.
While promising to keep the federal funds rate "exceptionally low" for an "extended period," the Fed indicated they would be reinvesting principal payments from agency debt and agency mortgage-backed securities in longer-term Treasury securities. The Fed's balance sheet will remain around $2.054 trillion.
The Fed's move has pushed two-year Treasury yield as low as 0.4892 percent. The U.S. dollar is also seeing pressure on the news, with the Japanese yen moving below 85 for the first time since November.
After rallying yesterday's on the news, Gold is giving back some this morning but is still clinging on to the $1200-level, last trading at $1200.10.
Related ETFs: (NYSE: SPY), (NYSE: GLD), (NYSE: IEF), (NYSE: TLT)
After digesting the news, investors may feel the ratcheted-down economic outlook at the Fed is more worrisome than the new quantitative easing measures. Double-dip recession fears are back in the forefront.
The Dow is down 218, the Nasdaq is down 63 and the S&P 500 is down 26.
While promising to keep the federal funds rate "exceptionally low" for an "extended period," the Fed indicated they would be reinvesting principal payments from agency debt and agency mortgage-backed securities in longer-term Treasury securities. The Fed's balance sheet will remain around $2.054 trillion.
The Fed's move has pushed two-year Treasury yield as low as 0.4892 percent. The U.S. dollar is also seeing pressure on the news, with the Japanese yen moving below 85 for the first time since November.
After rallying yesterday's on the news, Gold is giving back some this morning but is still clinging on to the $1200-level, last trading at $1200.10.
Related ETFs: (NYSE: SPY), (NYSE: GLD), (NYSE: IEF), (NYSE: TLT)
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