Fed Will Taper QE at March Meeting: Lebas

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Oct. 30 (Bloomberg) -- Janney Montgommery Scott's Guy Lebas discusses the market reaction to the Fed's decision to press on with $85 billion in monthly bond purchases. He speaks with Julie Hyman on Bloomberg Television's "Money Moves." (Source: Bloomberg)

Tell us what is going on here, it does not seem like something substantive to changed, but market seemed to be acting as the rates are going higher.

That is very much the case.

We saw no change in the bond buying rate guidance program or underlying assess that -- assessment.

The key is where we were going we started and in addition they were at three-month lows.

There was not a lot of impetus in the lower yields, certainly.

I think the contention that had been hoping for pulling back on any plans to taper had washed out the market.

The one thing i would think you could read is mildly positive as an economist, the fed did not derail some improvements in the economy, right?

That was surprising.

We would have expected more caution on their part.

Ben bernanke's congressional testimony for years has been worried about that.

And part of the problem that it cannot act right now.

Particularly trying to get some hints on shorter-term rates.

What are we seeing in the wake of the announcement here?

I would use that as a shorter entry point for the yield curve, although they are clearly looking towards reducing bond bias in the long and everything points to reducing it on the front end, by extending their forecast in the future or adding additional language.

The extension of low rate thomas's helps to drag returns on the five-year end into the positive.

Just quickly here, the conventional wisdom seems to be leaning towards tapering happening in march or april.

Where do you come out and that?

Right now if you look at the economic data coming out between now and march, the stars align and everything goes absolutely perfectly.

In theory the fed might be able to respond to purchases in january, but that is unlikely.

March is the next decision point.

We will be looking for that

This text has been automatically generated. It may not be 100% accurate.


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