Investors await Fed interest rate decision, earnings this week
NEW YORK (CNNMoney) Traders will have their eyes on Washington this week — but not because of a shutdown or debt standoff. They’ll be looking to the Federal Reserve.
The Fed’s policy committee wraps up a two-day meeting on Wednesday. It is highly unlikely to dial back its $85 billion monthly stimulus program that has helped to send stocks soaring this year.
Many investors had expected the Fed to announce it would cut back, or taper, its purchases of bonds and mortgage-backed securities at its meeting last month. But the Fed held off on doing so, saying it wanted more evidence of economic growth.
This month’s government shutdown may further muddle the economic picture. So when will the Fed finally start to taper? It’s possible Chairman Ben Bernanke, who will be stepping down after his term expires early next year, will leave that decision to his successor. Fed vice chair Janet Yellen has been nominated by President Obama to replace Bernanke. She still needs to be approved by the Senate.
Investors will also be watching earnings this coming week. Results from many big companies that reported last week were mixed. But they were good enough to help lift the Dow, S&P 500 and Nasdaq to weekly gains. The S&P 500 ended the week at a record high.
