Markets & Economy

The big question of 2014: Will Mel Watt reverse Fannie, Freddie fee hikes?

There's one sure way to make a credit disaster worse: Choke what little remains

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

The terrible taper has begun! As with most long-feared events, little happened in the instance. OK, two things. The 10-year T-note and mortgages -- mechanisms of the Fed's stimulus efforts, subject to tapering in January -- rose close to their highs of the year. But they've since fallen back. The Dow also jumped 292 points. The same Dow that had supposedly bubbled in the artificial stimulus of QE leaped in exuberance at its demise. Psychological-financial oddities aside, take two things from Taper Week. First, Clinton's Law: "It's the economy, stupid." Second, a mortgage-themed version of Charles Dickens' "A Christmas Carol." The Fed affirmed its 2014 forecast: an abrupt jump in GDP from 2 percent-ish to 3 percent-ish, and a rise in inflation from sub-1 percent to 1.5 percent. If the Fed is right, then we have entered a familiar business-cycle recovery and Fed tightening cycle. The Fed strengthened its promise to keep as-is the Fed funds rate, the overnight cost of mo...