Despite dismal data (or the potential for great escape velocity is around the corner data), major event risks, and a Treasury market that just won’t buy the dream of recovery that they are selling; the Fed stuck to its tapering guns… with a consensus $10bn taper…
- *FED TAPERS BOND BUYING TO $45 BLN MONTHLY PACE FROM $55 BLN
- *FED: ECONOMY PICKED UP, CONSUMER DEMAND RISING `MORE QUICKLY’
Shifting from “the economy slowed due to weather…” to “consumer spending is rising more quickly” the Fed is in full consensus “everything’s gonna be alright ” mode. This leaves the Fed buying $25bn a month of Treasuries and $20bn of MBS each month and facing the tough reality that their trillions did not generate enough momentum in the US economy to overcome some snow.
Perhaps more curiously, Kocherlakota did not dissent this time around. Looks like continued tapering is no longer hawkish unlike… continued tapering?