Stocks Fall on Bernanke Comments; Dollar Gains Ground after Fed Decision; Obamacare Hurting Jobs
Stocks declined today, after a two-day rally in the S&P 500, as Federal Reserve Chairman Ben Bernanke said that the central bank may “moderate” its pace of bond purchases later this year as risks to the economy have decreased and the jobless rate should fall. “The Fed’s walking a tightrope here,” George Rusnak, national managing director of fixed-income strategies for Wells Fargo Private Bank in Philadelphia, said. “They’re balancing preparing the markets that tapering is going to begin, but at the same time, comforting them that it’s not going to be too dramatic and too quick to be disruptive. It’s a fine line.”
Dollar Gains Ground after Fed Decision (Reuters)
The dollar reversed its earlier losses against the euro and yen today after the Federal Reserve’s Open Market Committee said it sees less of downside risks to the economy’s outlook and the labor market. Further, the dollar gained even more after Federal Reserve Chairman Ben Bernanke said the U.S. central bank’s policy setting committee sees a likely reduction in bond purchases. “The markets are reacting to the more positive economic assessment in the statement, notably the comment that economic risks have diminished,” said Vassili Serebriakov, currency strategist, BNP Paribas, New York. “I think it’s being seen as a signal that the Fed is close to tapering.”
The looming effects of Obamacare on their bottom line is prompting many small business owners to hold off on hiring and even to shed jobs, according to a recent Gallup poll. “We were startled because we know that employers were concerned about the Affordable Care Act and the effects it would have on their business, but we didn’t realize the extent they were concerned, or that the businesses were being proactive to make sure the effects of the ACA actually were minimized,” said attorney Steven Friedman of Littler Mendelson — his firm, which specializes in employment law, commissioned the poll.