The U.S. Federal Reserve (Fed) announced today that it will move more aggressively to end its quantitative easing program.

Essentially, the Fed has been printing money ($60-$70 billion per month) that allows the Federal Reserve to buy U.S. Treasuries, support the commercial paper market, and to keep mortgage rates historically low.

As well, the Fed made it clear it is in no hurry to raise historically low interest rates. The market initially reacted well to this news, but I wonder how this will play out in the coming weeks, especially in light of the reality that the Fed is currently almost the complete support for Mortgage-Backed Securities market.

As traders, how are you folks playing this? What trade do you see? How does this news affect your trading decisions? Do you think this is good news or bad?  


Trade in the day; invest in your life …

Trader Ed