Of course the federal reserve will eventually reduce the size of its balance sheet. It was inflated enormously to keep the nation afloat for the past (nearly) nine years.
However, when the news broke that the folks inside the central bank apparatus discussed the timing of this during their meeting last month the markets reacted swiftly.
A day that had seen a fairly robust upward move fueled by hiring data and strong business optimism reversed in the final hour of trading. Traders stepped in to dump stocks across the board and a rally that might have changed the tone of the market went away in the blink of an eye.
Futures this morning point to more selling at the open.
At 10am, we will judge whether it's time to move to 100% cash.
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