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  • Fed Announces Taper of Economic Stimulus

    Jeremy Collett, director of secondary marketing at Guaranteed Rate, offered his commentary on today’s Federal Reserve announcement:
     
    “The Fed announced today that ‘tapering’ of their economic stimulus is about to begin. I’m not surprised, but I still didn’t expect it (if that makes any sense).   The Fed will lower monthly bond purchases by $10 billion beginning in January, reducing purchases of mortgage-backed securities by $5 billion and U.S treasuries by $5 billion.  The Fed will continue to reinvest principal pay downs. The Fed will also maintain accommodative policy with exceptionally low rates until unemployment is well below 6.5%.  Mortgages got hit by 20 tics immediately after the announcement, but are now moving higher and are unchanged on the day –  but still are very volatile, though.   Equities are rallying post-Fed announcement, as the Dow is currently up 160 points as of 1 p.m. Central time.”
    Dec 18 2013