Fed's upcoming decision may have hampering effect on the market ?
US Stocks on Tuesday closed on lower levels, on the upcoming decision for the stimulus program. Dow Jones Industrial Average DJIA -0.06% closed down nine points to 15,875.26. The S&P 500 index SPX -0.31% closed 5 points, or 0.3% lower to 1,781.00. The benchmark index was down five days out of past six sessions. Nasdaq Composite COMP -0.15% was down six points, or 0.1, to 4,023.68.
The markets believe that 10% chances for Dec Taper, while major analyst predicting it to last till Dec of 2014.
The US government has been buying back bonds in sights to bring down the unemployment rates. Unemployment has fallen to 7% from 10% which has been 26 year high since 2009.
To put in prospect, growth of 2% to 2.3% in the last quarter has taken place, down from a 2.3% to 2.8% estimated earlier this year.2013 growth of 2 percent to 2.3 percent in September, down from a 2.3 percent to 2.8 percent estimate in March.
Chairman Ben S. Bernanke, whose second four-year term ends next month, has quadrupled Fed assets since 2008 with bond purchases which has come to being the third round of Quantitative Easing with total amounting to $1.54 Trillion before it ends.
Also to note that Non-Government institutes having been buying debts; especially Mutual Funds and Hedge Funds who have bought $630 billion worth of debt among themselves this year.
Will the Fed cut its $85 Billion dollars which it has been pumping into the monetary system to revive the economy ?
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