Yesterday, the stock market of the United States of America finished the trading session on a positive note, due to the announced decision of the FED to start gradual turning of the program of quantitative easing in January, 2014. Note that following the results of the meeting of the Committee on the open market, the key interest rate remained at the former level of 0-0.25%. Representatives of the FED also noted that it will remain in this range even after the unemployment rate falls below the level of 6.5%.
As for the volume of initial reduction of repayment of securities, it was decided to cut the current QE program by $10 billion, to $75 billion, considering the improvement of the situation on the labor market of the USA. Besides, FED declared that measures for reduction of volume of the repayment of bonds will be taken further if the economy continues to be develop steadily.
It also should be noted that during the meeting the improved economic forecasts were also announced. So, growth rates of the economy will make (in the current year) 2.2-2.3%, inflation and unemployment rates will be at the level of 0.9-1% and 7-7.1% respectively. Meanwhile, country gross domestic product in 2014, most likely, will increase by 2.8-3.2% whereas inflation will make 1.4-1.6%, and the unemployment rate will be reduced to 6.3-6.6%.
Following the results of the trading session, the Dow Jones Industrial Average index got stronger by 1.84% and was closed on a level of 16167.97 points, S&P 500 went into plus by 1.66% to the level of 1810.65 points, and the index of the hi-tech companies, Nasdaq, increased by 1.15% to the level of 4070.06 points.
Futures for Oil this morning are decreasing by 0.20% on Brent and 0.09% on WTI. Brent is traded on a level of 109.40$ per barrel, and WTI is on the price of 97.97$ per barrel. Gold yesterday started to increase in price after the announcement of the decision of the FED, but very quickly lost its strength and returned back to its usual levels. This morning, Gold is decreasing by 1.17% and is traded on the price of 1221.21$ per troy ounce, Silver is down by 2.47% at a price of 19.56$ per troy ounce.
Its also was an interesting day in the currency market, where increased volatility in all major currency pairs was observed. The decision originally weakened the US Dollar, however interest in the currency was returned quickly during Bernanke’s press conference, who practically promised that each meeting next year will actually go with program reduction on 10 billion Dollars, and by the end of 2014 QE3 will be completely reduced. One more interesting moment that the majority of officials are waiting for, is an increase in the interest rate, expected to happen in 2015. All these nuances defined the belief of investors in a bright future, however, it is better not to take everything mentioned so seriously, and it is worth dividing into two. This morning, the EUR/USD is on a level of 1.36790.