No taper! When was the last time so many were so wrong? This morning, I listed three reasons why the trading community was convinced the Federal Reserve would begin tapering. Let’s look at them again and what Chairman Ben Bernanke said about each:
First, unemployment gradually declining. Bernanke, in his press conference, acknowledged that the unemployment rate was declining.
Second, not tapering would indicate a cautious outlook on the economy. He does indeed seem more cautious. Bernanke said, “The economic data does not yet provide sufficient confirmation” to warrant reducing purchases. The Fed also reduced its 2014 economic outlook, as well as 2015.
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