US fiscal cliff joy fades after Fed split on 2013 QE

 
Michael Bow
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BUOYANT US traders were brought back down to earth yesterday after Federal Reserve minutes showed waning support for asset purchases in 2013, ending the euphoria felt by markets following Wednesday’s fiscal cliff deal.

Meeting notes from the Federal Reserve monetary policy committee showed several of the 12 man group wanted to stop the Fed’s relentless asset buying programme sometime later this year. The news sent US stocks down, with the Dow closing 21.19 points lower at 13,391.36.

The market rally following Wednesday’s fiscal cliff deal looked to have been extended to a second day yesterday after the release of good US job data and car sales figures.

Statistics from payroll provider ADP showed private sector employers in the US added 215,000 jobs in December, beating forecasts. US car sales also jumped by more than 13 per cent in 2012, according to figures.

But minutes showing policymakers thought asset purchases should stop “well before” the end of 2013 tempered the relief felt by markets over the fiscal cliff deal.