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Investors Throw a "Taper" Tantrum

Courtesy of Pacifica Partners

When financial experts refer to the printing of money, they are partly referring to to the US Federal Reserve (the "Fed") bond buying program.  The Fed has been buying US bonds since the financial crisis.  When the Fed buys US bonds, bond prices stay high, and this action helps keep interest rates low.  It also means that the bond sellers, flush with cash, can reinvest the proceeds into the stock market and financial system.  As a result, the stock market has now become addicted to stimulus, and when the Fed hinted it will "taper" its bond buying program, investors naturally threw a tantrum.  Our Q3 newsletter examines what the impact of "tapering" may be.

Check out the Pacifica Partners Q3 Newsletter.