Investors have a Taper Tantrum
The financial industry rarely has a challenge when coming up with clever headlines to describe the markets. Our newsletter gets its title from recent investor reaction to the mere hint that the US Feder-
al Reserve (the ‘Fed’) may reduce or ‘taper’ its monthly $85 billion bond purchase program. Since bond prices and interest rates move in opposite directions, investors have taken great comfort in Fed
bond purchases since they have provided fuel for financial markets while at the same time keeping interest rates anchored near generational lows.