Fed chief Ben Bernanke has indicated the central bank could begin tapering its bond purchases as early as this year if the economy and labor market improve. The Fed has been buying $85 billion worth of bonds a month to help stimulate the economy and keep interest rates low.
Economists polled by MarketWatch had projected 155,000 new jobs in June. “Tapering is in store, and we think the September call and $15-20 billion to start with is about right,” said David Ader, head of government bond strategy at CRT Capital Group, in a report.
“The strong advance in the employment count provides support for the Federal Reserve to start to taper back on its quantitative easing in the near future,” said Kathy Bostjancic, director of macroeconomic analysis at the Conference Board, in a Reuters story.
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Full disclosure: Tom Lydon’s clients own TLT.