"We would be surprised by a QE tapering move at the December 17-18 FOMC meeting," wrote Goldman Sachs chief economist for the Americas Jan Hatzius in a Wednesday client note.
"Although employment growth has improved, core PCE inflation has fallen further and now stands 90bp below the Fed's target. Probably partly for this reason, only a minority of forecasters seem to expect tapering in December, which itself raises the hurdle for a move," he added.
Hatzius expects the Fed to taper bond purchases after the FOMC meets in March, although January is "possible."
Big Bank Chart
The KBW bank index has returned 30% this year, after returning 30% during 2012. The following chart shows the year-to-date price performance for Morgan Stanley, Bank of America and Citigroup:
data by YCharts
-- Written by Philip van Doorn in Jupiter, Fla.
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