Fiscal Picture Looks Supportive

Despite the market's two-day selloff, the fiscal picture continues to look very supportive this month. The market's reaction to the possibility of the Fed ending quantitative easing (QE) and reversing course on monetary policy, sooner rather than later, is indicative of the type of reaction we will see if and when the Fed actually does do that. I am not even the slightest bit worried that this will actually happen; nonetheless, that's the reaction we can expect. And, as I said in my post on Thursday, it's a reaction you should fade. In other words, buy into weakness.

Getting back to the fiscal picture, so far in the month of February, we have seen $326 billion in net withdrawals (net withdrawals equal total withdrawals minus public debt redemptions) according to the most recent data from the Daily Treasury Statement. Given that there is still time left in the month, that's a very large number. In contrast, all of January saw $325 billion in net withdrawals and December produced $296 billion in net withdrawals....317 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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