Friends
The Federal Reserve concluded their final 2 day Federal Open Market Committee (FOMC) meeting of 2021 today. The release of the statement at 1:00 our time and the subsequent press conference by Chair Powell gave the market at lot to consider. What did we learn? First of all, the Fed will speed up the tapering process and should be done with the asset purchase program by early next year. The Fed Chair made it clear that they don’t expect to begin to raise rates until the asset purchase program was complete. But now the committee appears to be signaling the likelihood of 3 rate hikes next year. The markets have been building that in, but the committee members as recently as September were not seeing rate hikes yet in 2022.
The market’s reaction to Fed news whether expected or not, is always interesting to see. Apparently, today, investors were pleased with the Fed’s approach to dealing with inflation while at the same time keeping all options available should difficulties arise. You might say we saw a bit of sell the rumor and buy the news today.
By the close, the Dow Jones Industrial Average was up 383 points to finish the day at 35,927. The S&P 500 was up 75 points to close at 4,709. The Nasdaq Composite Index was up 327 points to close at 15,656. Gold was up $5 to trade at $1,777 per ounce, while oil was up $.71 to trade at $71.44 per barrel WTI.
We have seen a lot of volatility over the past few weeks. We’ve had a shift in Fed policy, record inflation data and a new Covid variant introduced into the mix. With 11 trading days left in the year we now will see if there’s a Santa Clause rally in our future, or will the Grinch have something to say about that.
Have a nice evening everyone.
