Stocks Increase as Fed Put Stimulus Taper on Hold The Federal Reserve surprised Wall Street Wednesday when it announced that it would not taper its bond buying program. This led to a rally that drove the Standard & Poor’s 500 Index and Dow Jones industrial to record highs. Weeks before the Fed’s two day policy meeting, Wall Street has been preparing for the pull back in the bond purchases, which was designed to improve the economy and job creation by keeping borrowing rates low. But the Fed was unsure that the economy and job market were strong enough to be sustained with the stimulus program. The Fed decided to keep the level of its bond buying at its present state of $85 billion a month. The market was expecting the Fed to begin tapering its purchases by $10 billion to $15 billion a month. The decision to postpone reducing its stimulus program was not expected by Wall Street. It led to buying in areas that will benefit from the stimulus, such as interest-rate-sensitive sectors that included housing and utilities.
Posted on: Sun, 22 Sep 2013 20:37:13 +0000
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