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Tapering Signals Year-End Economic Strength Indicators Point to Greater Recovery for 2014

The big "will-they or won't they" ended last month with the Fed's mid-December announcement that it would begin tapering its economic stimulus efforts. Federal Reserve Chairman Ben Bernanke's decision to scale back on Bond and Treasury purchases by $10 billion signaled that the economy has showed sufficient ability to play on its own, albeit, on a kid leash.

The Fed's ambivalence towards tapering dominated central banking discussions and created market volatility for most of 2013. Janet Yellen, the Fed's current vice chairman and President Barack Obama's nominee to succeed Bernanke, voted in favor of the policy action, which was bolstered by promising figures in the labor and housing markets.

 

The Year in Housing

Housing gained traction in 2013 amid job gains and rising stock values. Residential construction starts soared in November to a five-year high, explaining why builder optimism last month matched its highest level since 2005.


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