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ICYMI – The Federal Reserve will taper from this month, rate of $15bn/month

If you missed the Federal Open Market Committee statement and Chair Powell’s press conference on changes to US monetary policy, in summary:

The FOMC will ‘taper’ its QE purchase programme, as was widely expected
  • asset purchase reductions will begin immediately, this month
  • the reduction will be US$15bn/month
  • $10bn in US Treasuries, $5bn in MBS
  • the rate of taper will change as required
There was, of course, no change to Fed funds rate, unchanged at 0% to 0.25%.
The FOMC statement said inflation remained elevated and that it is “largely reflecting factors that are expected to be transitory”. Powell reiterated that the Fed sees supply bottlenecks continuing into 2022 but inflation will drop in Q2 or Q3, policy will adapt appropriately.

Major indices close higher as Fed tapers but will take it’s time

NASDAQ, Russell 2000 lead the way

The major indices are all closing higher and at record levels as the Fed tapers but will take it’s time in taking away the punch bowl.

The more rate sensitive NASDAQ and small-cap Russell 2000 index were the out performers.
  • The NASDAQ index rose over 1%
  • the Russell 2000 index rose 1.8%. Year-to-date the Russell index is up 21.73%
Other highlights:
  • NASDAQ recorded its fifth straight record close
  • Dow industrial average closed at a record level for the fourth consecutive day
  • The NASDAQ closed at a record level for the 41st time
  • S&P index closed at a record level in 2021 for the 62nd time
  • Dow industrial average closed at the record level for the 42nd time
  • The NASDAQ index is up for the eighth consecutive day
  • Consumer discretionary (+1.8%), materials (+1.1%), consumer staples (+0.9%) were the leading sectors
  • Energy -0.8%, utilities -0.3%, and industrials -0.2% where the lagging sectors
Looking at the major indices
  • Dow industrial average rose 104.39 points or 0.29% at 36157.02
  • S&P index rose 29.92 points or 0.65% of 4660.56
  • NASDAQ index rose 161.98 points or 1.04% at 15811.58
  • Russell 2000 index rose 42.42 points or 1.8% at 2404.28
Oversized winners today included:
  • Bed Bath & Beyond, +15.2%
  • Lyft, +8.1%
  • Uber, +6.6%
  • Rack Space, +6.32%
  • Robin Hood, +5.86%
  • GoodRx, +5.51%
  • Gamestop, +5.49%
  • Beyond Meat, +5.31%
  • AMC, +5.26%