In case you were wondering how central to markets the “tapering” story is right now…
The FT just published an article by its Federal Reserve correspondent, Robin Harding – with the title “Fed likely to signal tapering move” – and U.S. stocks took a sharp turn lower as a result.
The lede from the piece: “Ben Bernanke is likely to signal that the US Federal Reserve is close to tapering down its $85bn-a-month in asset purchases when he holds a press conference on Wednesday, but balance that by saying subsequent moves depend on what happens to the economy.”
Last week, when WSJ’s Fed reporter Jon Hilsenrath published a blog post with the opposite suggestion (that the Fed would strike a dovish tone) – titled “Analysis: Fed Likely to Push Back on Market Expectations of Rate Increase” – stocks spiked.
Right now, the S&P 500 is trading right around 1637, up only 0.7% on the day, versus levels around 1644 before Harding’s article hit the wires.
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