September 21, 2013

Wrap Up of Fed Surprise - Hail Ben Bernanke

  • Fed to keep buying $85 billion in bonds per month
  • Stocks and Bonds rally, U.S Dollar slumps
  • This won't last forever, of course!
The Fed defied investor expectations on Wednesday by postponing the start of the wind down of its massive monetary stimulus, saying it wanted to wait for more evidence of solid economic growth (i.e Labor Market).

Investor responded by propelling U.S stocks to record highs and driving down bond yields. 

Yields on U.S Treasury debt had risen over the summer on expectations the Fed would cut back its $85 billion/month in bond purchase that have been the cornerstone of its efforts to spur the economy (source: Reuters)

The famous safe havens also slumped to 2 months low, giving the chance for riskier assets to rise and shine.

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