In a decision that shocked no one, the Federal Reserve reduced quantitative easing by another $10 billion, cutting its monthly asset purchasing program to $45 billion per month. And after initially faltering, stocks cheered the news, with the S&P 500 continuing the steady uptrend it has enjoyed all week.
“The Fed understands the risks involved with a removal of accommodation and I believe in their eyes, boring is good right now,” wrote Peter Boockvar, chief market analyst at The Lindsey Group.
For trader Jim Iuorio of TJM Institutional Services, the Fed is walking a tightrope with expert ability. “The Fed did a decent job of staying committed to balance sheet reduction while at the same time convincing the market that they are there as needed,” Iuorio said.