Treasuries rose yesterday, snapping a three day decline, before reports today should show U.S. jobless claims increased last week. Initial jobless claims increased by 7,000. Economists believe this will damped the Fed’s plan to withdraw stimulus money. However, weak employment numbers might not be enough to change Big Ben’s mind. The Retail Sales numbers, to be released Friday, would also have to come in weak before the FOMC meeting next week. Focus today is not when the Fed will taper, but how much they will taper. The size of the taper matters as does the composition. Economists believe the Fed will reduce Treasury purchases and sustain the MBS purchases. That could mean good news for us!
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