U.S. stocks declined on Wednesday after Federal Reserve Chairwoman Janet Yellen said that rate hikes would happen after about six month from the time tapering bond purchases is finished.
Yellen fielded questions from the press following the Fed policy announcement. in her first news conference as the Fed chairwoman, succeeding Ben Bernanke. The FOMC decided to trim the bond purchases by another $10 billion this month and changed the way it targets unemployment and inflation in deciding short-term interest rates.
The Fed said it would now consider a “wide range” of factors instead of relying mainly on the unemployment rate. The Fed statement also stressed that the bank could keep short-term rates below what is viewed as “normal” even if employment levels and inflation hit its targets.
The S&P 500 fell 14 points, or 0.8%, to 1,857.25 after the announcement. The Dow Jones Industrial Average dropped 131 points, or 0.8%, to 16,207.45.The Nasdaq Composite shed 36 points, or 0.8%, to 4,29.29.
Things where down, but not a lot until Yellen dropped the bomb that QE would be done by this fall. Of course, with five meetings to go and $10-$15 billion taper per meeting, that brings us right to October. Still, this comment caught many traders off guard and provided some afternoon fireworks to the downside.
Yields on 10-year Treasurys surged, gold prices fell further and the dollar spiked against the Yen after the Fed announcement.
Yellen fielded questions from the press following the Fed policy announcement. in her first news conference as the Fed chairwoman, succeeding Ben Bernanke. The FOMC decided to trim the bond purchases by another $10 billion this month and changed the way it targets unemployment and inflation in deciding short-term interest rates.
The Fed said it would now consider a “wide range” of factors instead of relying mainly on the unemployment rate. The Fed statement also stressed that the bank could keep short-term rates below what is viewed as “normal” even if employment levels and inflation hit its targets.
The S&P 500 fell 14 points, or 0.8%, to 1,857.25 after the announcement. The Dow Jones Industrial Average dropped 131 points, or 0.8%, to 16,207.45.The Nasdaq Composite shed 36 points, or 0.8%, to 4,29.29.
Things where down, but not a lot until Yellen dropped the bomb that QE would be done by this fall. Of course, with five meetings to go and $10-$15 billion taper per meeting, that brings us right to October. Still, this comment caught many traders off guard and provided some afternoon fireworks to the downside.
Yields on 10-year Treasurys surged, gold prices fell further and the dollar spiked against the Yen after the Fed announcement.