[video] Quick Take: Why the Fed Delayed the Taper
NEW YORK (TheStreet) -- All the buzz on Thursday is about the Federal Reserve's decision to forego any tapering efforts in the month of September. However, Dan Collins of the Dan Collins Report told TheStreet's Jill Malandrino he thinks tapering will happen by year's end.
Collins said stocks and bonds are the two asset classes that have reacted the most to what the Fed is or isn't doing. He also suggested that equity markets threw a bit of a tantrum earlier this year when the Fed first suggested that tapering was becoming an option.
However, over time the market came to realize the Fed would leave interest rates unchanged and only trim the asset purchases, not stop them altogether.
Collins went on to say that traders and investors are looking forward to a regular market once again -- one that trades on fundamentals rather than on how the Fed might react to economic data.Unfortunately, each time the economy has seen a modest improvement and looks to be turning the corner, the data show disappointing results and then a slowdown ensues. However, Collins concluded the Fed would look to start tapering by the end of 2013, even if the data aren't all that good. Even so, he expects the tapered amount will be small at the beginning. -- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell Follow @optionsprofits
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