Have folks fallen asleep? The FOMC meeting start is just 6 days away and the ‘statement’ is just a week away with the Fed chair presser immediately following.
Even though the FED statement is highly likely to signal the start of the tapering of quantitative easing (QE) the 10 year treasury is falling in yield–now down to 1.57%–off 4 basis points on the day. On the other hand the 2 year treasury is up 2-3 basis points on the day to .51%–the highest level in 18 months.
My expectations months ago is that we wouldn’t see much disruption to the markets until at least the taper is announced and actual tapering starts. Seems to me that maybe I am too pessimistic–maybe in fact much of the anticipation is ‘built in’? Well I will believe it when I see it – It seems to me that big money in the equity markets will have a ball baby crying fit at some point–it has worked before (making the Fed pause/end tapering).
We’ll see – as always it doesn’t pay to try ‘position’ holdings any differently based on what might happen–none of us are that smart.