12/18/13 2:30 PM – Fed Announces Beginning of Tapering Bond Buying

The Fed announced today just before Ben Bernanke’s last Fed meeting announcement that it would begin tapering back on its bond buying starting in January. The market loved it, probably for two reasons.

1) The tapering means the Fed believes the economy is getting stronger

2) The Fed also announced that it would keep low rates in place for well beyond the previous targets it had set. The target rate for Fed Funds will remain at 0.25% into and maybe throughout 2016. This may be the highly dovish Janet Yellen influence.

Even though market sentiment is at levels that nearly always lead to a pullback this is pretty much a double dose of good news from an important market influence that may keep the market afloat for a while longer.

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