July 12, 2017
Janet Yellen remains confident on the economic outlook and expects tapering to begin sometime this year and wind down in 2022. She did not, however, say to what level the Fed's $4.5 trillion balance sheet will fall. The Fed's own Beige Book, however, has a less upbeat message on the economy, downgrading the general assessment across its 12 districts from modest-to-moderate strength to slight-to-moderate strength.
The Dow was virtually unchanged Monday and Tuesday but jumped a sharp 0.6 percent in today's session to a new record at 21,532. Money also moved into the bond market where the 10-year Treasury yield fell 4 basis points to 2.32 percent. The dollar was little changed and oil, near $45.50, could only get a small bounce from a large build in weekly inventories.