December 16, 2021 - Page 2 of 2 - Financial Occultist

It was not like he wasn’t full speed ahead to taper and even tighten, but the market took the news in stride and moved higher. It may be that growth is high which is good, and perhaps a belief that inflation is also high but also has some extra stuff (supply chain) that will fade away over time. Now it may be that today’s gains may lead to tomorrows losses, but for now, the markets are closing with solid gains.

Highlights:

The S&P, NASDAQ, Dow snapped their two day losing streak
The Russell 2000 snapped its four day losing streak
The gains were led by the NASDAQ index which moved up over 2%
The Russell 2000 index was up about 1.65%
the energy sector was the only one of the S&P 11 sectors to decline (down -0.5%)
The technology sector was the big winner (up 2.6%)

The final numbers are showing:

Dow industrial average rose 383.23 points or 1.08% at 35927.44
S&P index rose 75.74 points or 1.63% at 4709.84
NASDAQ index rose 327.95 points or 2.15% at 15565.59
Russell 2000 rose 35.55 points or 1.65% at 2195.208

FOMC Dot Plot and Central Tendencies from December 2021

16-Dec-21 05:53 am

Analysis

Anirudh Sethi

The dot plot shows the average rate at the end of 2022 at 0.9% vs 0.3% in September. In 2023 2.4% vs 1.8% in September.

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FOMC statement from the December 2021 meeting

16-Dec-21 05:51 am

Analysis

Anirudh Sethi

The full statement from the Federal Reserve December 2021 policy meeting.

The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals.

With progress on vaccinations and strong policy support, indicators of economic activity and employment have continued to strengthen. The sectors most adversely affected by the pandemic have improved in recent months but continue to be affected by COVID-19. Job gains have been solid in recent months, and the unemployment rate has declined substantially. Supply and demand imbalances related to the pandemic and the reopening of the economy have continued to contribute to elevated levels of inflation. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.

The path of the economy continues to depend on the course of the virus. Progress on vaccinations and an easing of supply constraints are expected to support continued gains in economic activity and employment as well as a reduction in inflation. Risks to the economic outlook remain, including from new variants of the virus.

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