There was some good news from the Federal Reserve yesterday afternoon, depending on how you look at it. Fed chair Ben Bernanke announced that they would not be tapering off their monthly bond purchases, which now consist of $85 billion worth of bonds bought every month. The purchases are generally seen as bolstering the markets as well as the larger economy.
On the other hand, the reason Bernanke gave for continuing the purchases was that the economy was still not strong enough to withstand their loss. He has given 7 percent unemployment as a gauge for when this economy is solid enough to stand on its own; we're currently at 7.3 percent.
But everyone realizes that the Fed will begin tapering off those asset purchases at some point, and reasonably soon. The question is, what effect will the loss of all those assets have on the market as a whole? We've explained the entire situation in a bit more depth in a new article on the main part of the Echelon Wealth Strategies Web site. Give it a read, and if you have any questions about it, feel free to give me a call.
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