Fed Tapers $10 Billion, Says Economy, Consumer Demand "Picked Up"

Tyler Durden's picture

Despite dismal data (or the potential for great escape velocity is around the corner data), major event risks, and a Treasury market that just won't buy the dream of recovery that they are selling; the Fed stuck to its tapering guns... with a consensus $10bn taper...

  • *FED TAPERS BOND BUYING TO $45 BLN MONTHLY PACE FROM $55 BLN
  • *FED: ECONOMY PICKED UP, CONSUMER DEMAND RISING `MORE QUICKLY'

Shifting from "the economy slowed due to weather..." to "consumer spending is rising more quickly" the Fed is in full consensus "everything's gonna be alright " mode. This leaves the Fed buying $25bn a month of Treasuries and $20bn of MBS each month and facing the tough reality that their trillions did not generate enough momentum in the US economy to overcome some snow.

Perhaps more curiously, Kocherlakota did not dissent this time around. Looks like continued tapering is no longer hawkish unlike... continued tapering?

Pre-FOMC: S&P Futs 1874, 10Y 2.66%, EURUSD 1.3865, Gold $1295

Here is the Fed blaming, what else, the weather:

Information received since the Federal Open Market Committee met in March indicates that growth in economic activity has picked up recently, after having slowed sharply during the winter in part because of adverse weather conditions

And here is the full redline comparison: