Ah, about that taper.
by Gilbert Keith
12:46 PM EDT:
NEW YORK (MarketWatch) — U.S. stocks declined on Wednesday, with the Dow industrials and S&P 500 index retreating after a three-day winning run, as Wall Street waited for the Federal Reserve’s monetary-policy decision.
The Federal Open Market Committee concludes a two-day policy gathering Wednesday, with analysts surveyed by MarketWatch expecting the central bank to cut $10 billion from its $85 billion in monthly bond purchases. Read why taper ‘timing is irrelevant’ for longer-term investors.
Economic reports, including some disappointing housing data on Wednesday, “are not supporting the taper, but I still think they are going to move forward,” said Elizabeth Ptacek, senior vice president and senior credit real-estate analyst at KeyBank.
“We’ve already seen a surge in interest rates; the Fed may feel like they just have to get it over with by starting a modest taper,” said Ptacek.
2:10 PM EDT:
WASHINGTON (MarketWatch) — The Federal Reserve on Wednesday held its asset purchase program steady, putting off any decision for tapering until later in the year in a decision that surprised markets.
By a vote of 9-to-1, the Fed held its bond-buying program at $85 billion, citing tighter financial conditions.Read text of FOMC statement.
The move surprised economists, who had expected a “tiny taper” in a range of $10 to $20 billion.
Stocks (SNC:SPX) shot up into positive territory on the move. Gold futures climbed by $35 an ounce. Read Market Snapshot for more reaction.
The Fed has been buying $40 billion of mortgage-related assets and $45 billion of Treasurys since the start of the year.