Provided the economy performs as well as Federal Reserve policymakers expect, the Fed will phase out large-scale asset purchases within the next 10 months. That’s a big “if” of course. The Fed has been projecting a stronger recovery each of the last four years, only to see growth average around a tepid 2%.
Gold and silver tumbled the most in six weeks as signs of faster U.S. economic growth fueled bets that the Federal Reserve will keep cutting stimulus. Palladium capped the longest decline in almost five months.
The Wall Street Journal is on the hard-money side of the debate over recent monetary policy. But its editorial on the departure of Ben S. Bernanke as chairman of the Federal Reserve articulated a conventional wisdom that transcends that debate.
Overall the GDP growth report matches expectations and offers no consumer shocker, and as such signs of positive growth for 2014 are soothing investors’ wounds incurred in the recent week, sending bond yields marginally higher in response.
The January statement released minutes ago is practically identical to the prior month and contains the highly anticipated continuation of measured reduction in the monthly pace of bond purchases. The FOMC voted unanimously, and we don’t recall off hand the last time that happened.
U.S. stock index futures pared a gain of 8-points following the release of a disappointing durable goods report. New orders for longer-lasting goods slumped at year-end by 4.3% leaving estimates of a rise wanting.