Fed and Bond buying

[dafoe1999]

What do you think about the slow down of the bond buying stimulus? What will this do to our investment accounts?

[matchewed]

Over the short term something. Over the long term just another bump or dip in the road. I wouldn't sweat it unless you want to learn more about the fed and what they do.

[Eric]

Over the very short term, looks pretty good!

[El Gringo]

With how markets have reacted over the past few months to positive economic news (i.e. they've reacted negatively, due to the fear of a Fed taper), I'm somewhat surprised and confused why the markets surged today after the news....

[PeachFuzzInVA]

With how markets have reacted over the past few months to positive economic news (i.e. they've reacted negatively, due to the fear of a Fed taper), I'm somewhat surprised and confused why the markets surged today after the news....

Just when you start to think the markets make sense, they throw you for a loop all over again. I gave up trying to understand the psychology of the market back in 2009 when Bank of America rose 300% in 2 days for no real reason whatsoever.

[msilenus]

With how markets have reacted over the past few months to positive economic news (i.e. they've reacted negatively, due to the fear of a Fed taper), I'm somewhat surprised and confused why the markets surged today after the news....

My read is that they were expecting a much faster tapering.

I think markets tend to view the Fed as a bunch of punch bowl thieves, always lusting for pilfered punch.  Their bias is to expect sharper responses to positive economic news than the Fed is actually likely to take, and over-anticipate policy changes from these meetings.

[El Gringo]

Investors are funny people.

[gimp]

My read is that they were expecting a much faster tapering.

I think markets tend to view the Fed as a bunch of punch bowl thieves, always lusting for pilfered punch.  Their bias is to expect sharper responses to positive economic news than the Fed is actually likely to take, and over-anticipate policy changes from these meetings.

I think this is just right. Everything the government does is predicted to have huge, everlasting, widespread effects. One day we'll be sleeping on gold-embroidered silk, the next we're begging on the street - or vice versa.

Government decisions don't occur in vacuum and there's always huge pushback to any change. Things tend to change slowly. Heck, the government is even set up in a way such that things change slowly from a policy level.