Fed’s Still Printing: Markets May Be Celebrating, but Here’s Why
It had been a long time since the Federal Reserve really surprised the markets. That is, before last week’s announcement that the central bank was going to keep its foot on the gas pedal—with the “pedal to the metal,” as the saying goes—leaving monetary stimulus in place.
As you probably know, at the last Federal Open Market Committee (FOMC) meeting, the Federal Reserve announced it would continue buying mortgage-backed securities worth $85.0 billion each month for the foreseeable future. Everyone was expecting some reduction in monetary stimulus; to have no change at all was quite a surprise.