NEW YORK ( TheStreet) -- The big news out of the Federal Reserve meeting on Wednesday was that Fed officials have chosen not to taper just yet. That led to a spike higher in almost all asset classes.
To look at the fundamentals, there was a strong case against tapering now. Although this is in hindsight, that the Fed reduced its growth outlook yesterday was the first signal that tapering was probably not yet on the table.
Reducing growth forecasts and then telling markets support to help that growth will be removed is somewhat counterintuitive.
Meanwhile, bank lending rates are at multiyear lows. Bank lending simply hasn't returned to its pre-recession levels. The gradual nature of the economic recovery as seen in the data has led to a slower-than-expected return to credit lending growth.The talk of Fed tapering hasn't helped lending, either, as higher rates have made it more expensive to borrow. And so it didn't seem like a wise time for the Fed to start forcing rates higher. Lastly, with Larry Summers out of the race as new Federal Reserve chairman, Janet Yellen, now the Fed's vice chairwoman, is perceived as the front-runner. She is said to be dovish in her policy stance, which means she would probably prefer to keep stimulus measures in place. (GDX).