Singapore Stock Market News

US FOMC - tapering delayed

StockFanatic
Publish date: Thu, 31 Oct 2013, 01:11 PM
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The Fed's decision to keep the status quo for the QE programme was in line with our and market expectations.

We think there are two reasons that weaken the case for tapering in the near term:

1) the lingering uncertainties about the budget and debt ceiling entering the new year, as the leadership agreed to extend the debt ceiling until 7 Feb and government funding until 15 Jan, and

2) the mixed economic signals amid the uncertainty over the impact of the partial government shutdown on economic activity in 4Q13.

In a nutshell, we only expect the Fed to initiate the tapering of asset purchases once there is stronger economic improvement and the smooth resolution of the political impasse over the budget and debt issues. We think that the QE tapering may be delayed until 2Q-3Q 2014.
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