Has Christmas Come Early for the Fed?

One day does not make a trend, but we are surprised by the market's reaction to the notably good payroll, personal spending, consumer confidence, and GDP data released recently. Specifically, we have stocks up 1.1%, the dollar unchanged, and bond yields anchored to 2.88 on the ten year treasury. This is the best possible outcome the Fed could have hoped for given that the probability of a December taper has dramatically increased in the last two days. Normally we'd expect taper fears to be met with falling stocks, a rising dollar and rising bond yields. If this type of positive market reaction continues it will indeed be an early Christmas for the Fed.