The Fed has announced that it will officially begin tapering the pace of its asset purchases later this month. CNBC reports that, on a monthly basis, the reduction will see $10 billion less in Treasurys and $5 billion less in mortgage-backed securities. The announcement caused good rebounds for gold and silver prices.

 

CNBC/Jeff Cox
Fed to start tapering bond purchases later this month as it begins pulling back on pandemic aid

The Federal Reserve announced Wednesday it soon will begin reducing the pace of its monthly bond purchases, the first step toward pulling back on the massive amount of help it had been providing markets and the economy.

Tapering of bond purchases will start “later this month,” the policymaking Federal Open Market Committee said in its post-meeting statement. The process will see reductions of $15 billion each month — $10 billion in Treasurys and $5 billion in mortgage-backed securities – from the current $120 billion a month that the Fed is buying.

The committee said the move came “in light of the substantial further progress the economy has made toward the Committee’s goals since last December.”

You can read the full story, here.

 

CNN Business/Allison Morrow
Why the Fed is winding down the party on Wall Street (and what it means for you)

It’s official: The Federal Reserve is winding down its aggressive pandemic-era stimulus measures, a process Wall Street nerds call “tapering.” But what, exactly, does that mean?

The short answer: Money has essentially been free for the past year and a half, thanks to the Fed’s double-barrel shotgun approach to economic stimulus — interest rates near zero and a massive investment in bonds that keeps yields near rock-bottom. When the Fed eases off the stimulus pedal, borrowing could grow more expensive, making businesses pay more, which means less profit, which means Wall Street is…sad.

For a more in-depth answer, read on!

While it might sound somewhat academic, the results of the Fed’s decision could have a huge impact on everyday people, especially those looking to buy a home or run a business.

You can read the full story, here.

 

Kitco News/Jim Wyckoff
Gold, silver see solid price rebounds from Wednesday’s sell offs

Gold and silver prices have made good rebounds from selling pressure seen Wednesday, before the afternoon FOMC meeting conclusion. It appears metals traders were preparing for a hawkish FOMC statement and tone from Fed Chairman Jerome Powell, but then after the fact reckoned the Fed may not be leaning as hawkish on U.S. monetary policy as many expected. Also, the FOMC meeting’s results appear to be a classic case of “sell the rumor, buy the fact” from the shorter-term futures traders. December gold was last up $21.20 at $1,785.00 and December Comex silver was last up $0.634 at $23.865 an ounce.

The market place is still digesting the FOMC meeting that ended Wednesday afternoon. The Fed announced its tapering of monthly bond buying, as expected. It’s also expected the tapering will wind down next summer. There were no big surprises in the FOMC statement or Fed Chair Powell’s press conference, which suggested the marketplace had pretty well dialed in the outcome. Powell did suggest that U.S. interest rate hikes do not necessarily have to come after tapering winds down–and that leaned a little dovish and may have helped lift gold prices off their daily lows Wednesday.

Read the entire story, here.

 

 

 

 

 

 

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