Adam had the Wall Street Journal’s Jon Hilsenrath’s initial thoughts on the prospects for a ‘taper’ in the wake of Friday’s nonfarm payroll report and other US data: WSJ’s Hilsenrath says non-farm payrolls ‘really increases’ probability of December taper
In a piece following later, Hilsenrath adds further comments saying, the Fed is ‘closer to winding down’ the current bond purchasing program …’possibly as early as December’ (he doesn’t quantify the chances).
He interprets Friday’s rally in US stocks, and a barely changed US 10-year yield, as a sign that the markets are getting comfortable with the prospects of a taper, noting that recently good economic news has often seen selloffs, but not on Friday:
“Good news is good news today,” said Katie Nixon, chief investment officer at Northern Trust Wealth Management
Further;
- the economic backdrop looks better now than it did in September
- Congress … appear to be crafting a small government spending agreement for the coming year … headwinds from federal tax increases and spending cuts this year could wane, possibly setting the stage for stronger economic growth next year
- BUT – the household showed only 83,000 people became employed between September and November, while the number not in the labor force during that stretch rose by 664,000 – unemployment fell from 7.2% to 7% during that period because people stopped looking for jobs
- Also noted “Inflation, as measured by the Commerce Department’s personal consumption expenditure price index, was up just 0.7% from a year earlier, well below the Fed’s 2% target.” (see this for more)
The full article is here: Fed Closes In on Bond Exit (The Wall Street Journal is gated, so if you’re unable to access the article try a search of Google news using the headline)
