A new expression was added to the financial lexicon this morning

A new expression was added to the financial lexicon this morning. Dovish Taper. That's the market's reaction to the 'surprise' announcement by the Fed to begin winding down it's QE programme, with equity markets flying, bond yields largely unchanged and gold easing below USD $1220 per ounce. Were it not for low official inflation figures, the taper would have been 'a lock', as headline economic data has impressed the past two months, but we'd be cautious about cracking the champagne in celebration at the 'end of the QE era' as Ambrose Evans Pritchard did in an article today. We're not so sure the economy really is firing on all cylinders, with mortgage applications hitting a 13 year low today, and lets not forget they're still planning to expand the balance sheet by $900bn in 2014 as we speak. My full report - including a look at the Fed's balance sheet here (VIEW LINK)