On September 13 of 2012 the Federal Reserve Open Market Committee (FOMC) announced Open Ended Quantitative Easing. The statement/guidance from last year's meeting can be found here.
Cliff Notes (monthly purchases went from $45 Billion up to $85 Billion). At the December 2012 meeting the Fed said the easing would continue until certain economic hurdles were met - Evans Rule).
Effective immediately, the FOMC agreed to purchase $40bn per month of MBS on an open-ended basis
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The Fed also extended its policy guidance through at least mid-2015 and will continue Operation Twist through the end of the year
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Committee members downgraded their outlook for 2012 but upgraded growth projections for 2013
Today, it is widely anticipated that the Fed will begin incrementally removing some of that monetary methamphetamine. In somewhat related news, Vince Gilligan's genius brainchild, Breaking Bad is also coming to an end in a couple weeks.
Nobody knows how the market will respond to the weaning process. At 1pm Chicago time, super fast computers will start reacting to the Fed Statement about the Taper/Economic Growth. In the interim, we'll sit back and see what they have to say.
I must point out that since the Fed announced Open Ended Quantitative Easing 370 days ago - primary futures markets have made some big moves. Expected? Unexpected? You tell me......
September 13, 2012
Crude (WTI) $98
S&Ps $1450
Gold $1770
Copper $371
Dollar Index $79.4
Long Bond 147
10 year yield 1.76%
We'll see what they have to say later today. Tune in.