FOMC Fed Tapers another $10 B to “mere” $65B QE per month, Zerohedge: Fed “ignores” EM crises
here we go again
Of course, ignoring is perhaps purposeful? Not disclaimer of problem, but intention…?
Consensus that the Fed would extend its $10bn taper from December with a further $10 bn taper today (reducing the monthly flow to a ‘mere’ $65 billion per month – $30bn MBS, $35bn TSY) was spot on. We suspect the view, despite the clear interconnectedness of markets (and flows), of the FOMC is that “it’s not our problem, mate” when it comes to EM turmoil.
- *FED TAPERS BOND BUYING TO $65 BLN MONTHLY PACE FROM $75 BLN
- *FED SAYS LABOR MARKET `MIXED,’ `SHOWED FURTHER IMPROVEMENT’
- *FED REITERATES LOW RATES UNTIL JOBLESS RATE `WELL PAST’ 6.5%
- *FED REPEATS RISKS TO OUTLOOK HAVE BECOME `MORE NEARLY BALANCED’
- *FED SAYS UNEMPLOYMENT HAS DECLINED `BUT REMAINS ELEVATED’
It took Hilsenrath 2 minutes after the FOMC announcement to release the following 729 word analysis of what Bernanke just did.
FOMC Reaction: JPY Loses 102 And Stocks Crumble
Emerging Market FX is tumbling post FOMC; IG and HY credit market spreads are knocking wider; Treasury bond yields are plunging (after a knee-jerk higher); and the USD is rising. However, JPY is outpacing the USD move and with its break below 102 critical support, US equities are plumbing new pre-December-Taper lows… S&P futures are now down over 35 points from the morning “EM is fixed; where are all the sellers” highs…
Dec Taper gains gone for Dow and S&P and almost for Russell…
JPY carry unwind collapsing stocks…
10Y kneejerked higher in yield and then tumbled…
EM FX is fading back…