The market participants are more confused and unanchored than ever from what to expect from the Fed. To make matters worse, it is clear that Republicans have every intention to use the debt ceiling as pawn to attack government spending on Obamacare. Investors are now looking at a new “Fiscal Cliff” style fear. This remains a vulnerable period in the market.
WOW. It wasn’t that the Fed didn’t taper. The message was that economy is in no state to begin tapering any time soon. The bottom line is that the media pundits and analysts were dead wrong. In our past blogs and presentations we have maintained that the Fed will never be able to exit. We will have further follow up presentations to explain.
It is finally here, the most anticipated FOMC Statement of the year. Will the fed taper and how much? The market is pricing in a tapering of about 10 billion will be watching in anticipation if their forecast comes to fruition. We can do all the forecasting we want, but the fed is completely in control of the next market move. Anticipate considerable knee jerk reactions to the initial release including a number of fake out moves higher and lower.