The day after the no-taper decision

Before the markets opened, Fed speculation swirled

Stocks, bonds and Treasurys rallied on the surprise news (or not so suprising, depending who you read) that the Federal Reserve decided to keep its support of the economy, via purchases of mortgage bonds and gilts. But that was yesterday.

Before market open, here's the chatter on the whole thing.

Financial analysis company HSH is anticipating mortgage rates to firm up a little bit in the wake of the decision. Seems like a no-brainer, the dual-approached monetary policy artificially compresses rates. But then, the HSH note further does not speculate upon the extent to which it compresses, or will compress further.

Further, the feeling to the language indicates economic strengthening going into the October announcement. The logical conclusion being tapering going into the cold, winter months; not to put words in their mouth. Where I differ on this opinion is on the October date. To me a December taper feels better, and I'm not the only one who thinks this.

"We now expect the QE tapering process to start at the December 2013 FOMC meeting and to conclude in September 2014, three months later than before," writes Goldman Sachs (GS) analyst Jan Hatzius. "Our baseline is that the first step will consist of a $10bn cut in Treasury purchases."

Hatzius then goes on to speculate about the fund rate, to which the reader reacts: "now you're talking."

The other side of the QE coin, as mentioned above, is the zero-interest rate policy.

Commenting on mREITS, KBW (KBW) analysts sent out a note on the sector: "We’re left feeling marginally better on the group than we have for the past several months. We view the September non-taper positively, but with the group rallying 4.5% on the news we see much of it already priced in," according to an email sent to clients. "The question for the sector remains, “Where do rates go from here?”

So, yes, when might the Fed follow up and start raising it's own lending rates? Early 2016.

Goldman gives three reasons for the dovish view. First, is unemployment is several percentage points below its potential level. Second, inflation will remain low. Third, and this is reading between the lines, Yellen is going to be the next Fed chief.

So taking all this into consideration, it appears likely for the rallies from yesterday to soften into today's trading. It's going to be a good day.

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