Will the Fed be the Grinch and Steal the Christmas Rally? | Morning Express

**Fed Decision Day**

Today is bigger than any typical Fed Day, it is Decision Day. Will the central bank play the Grinch that Stole the Christmas Rally? The committee is expected to increase the pace in which they are tapering monthly asset purchases from $15 billion to $30 billion. On November 3rd, they announced the highly anticipated taper and bubble wrapped it as dovish as possible. We characterized it as a net-zero taper; per month, they planned to purchase $10 billion less in Treasuries and $5 billion less in mortgage-backed securities. Coincidentally, the same day, the U.S. Treasury announced it will decrease issuance by $15 billion per month for approximately the next three months, and potentially more thereafter. Needless to say, risk-assets welcomed the coordinated move, and the Federal Reserve successfully landed the taper.