Goldman, JPMorgan: Permission To Freak Out GRANTED

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All of those Fed guys telling you that you overreacted to gentle Ben's words last month were lying, according to people in the know.

Economists at Goldman Sachs and J.P. Morgan specifically cited the government's announcement earlier on Friday of stronger-than-expected U.S. jobs growth for June as a factor in bringing forward their expected timing of the Fed slowing.

Goldman and J.P. Morgan are two of 21 U.S. primary dealers - the large financial firms that do business directly with the Fed - that were polled by Reuters on Friday.

Of 17 dealers who answered a question on the expected timing of a reduction in purchases, 11 called for September, while three said October, two said December and one said it would happen in the first quarter of 2014….

"With solid job gains through the first half of the year, the recovery appears to be overcoming the worst of the fiscal headwinds now at peak force. Fed officials are likely to keep tentative plans to start scaling back (quantitative easing), probably in September, barring a major upset," said Peter D'Antonio, economist at Citigroup in New York….

The median forecast for an initial reduction of $20 billion per month was unchanged from the June 19 poll.

Of 16 primary dealers who answered a question on the timing of the end of the latest bond purchase program, 14 said it would happen on or before the middle of 2014, while two said September 2014. Those results were little changed from the June 19 poll.

Poll: Majority of U.S. primary dealers see Fed slowing bond buying in Sept [Reuters]
J.P. Morgan, Goldman Sachs Now See Fed 'Taper' In September [WSJ Real Time Economics blog]

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