US Close 6 Apr 17: Late sell off in shares on Tax and Fed Res balance sheet concerns

US sharemarkets reversed course to end lower. The Dow Jones index was up 198 points after the strong jobs data but lost all gains after the Fed minutes. In addition House Speaker Paul Ryan said that the talks of tax reform could take longer than the discussions between political parties on healthcare reform. The Dow Jones fell by 41 points or 0.2%. The S&P 500 index fell by 0.3% while the Nasdaq lost 34 points or 0.6%.

 

 Minutes of the March meeting of the Federal Reserve Open Market Committee show that officials had a briefing on the $4.5 trillion balance sheet. The minutes said that Fed officials agreed that if the economy continued to perform as expected that "a change in the committee's reinvestment policy would likely be appropriate later this year" allowing the balance sheet to shrink (effectively tightening monetary policy). Also around half of FOMC members also had not included possible fiscal stimulus measures in their economic assumptions.

 

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