Fed's Decision to Taper Affects Bonds, Mortgages

The combination of steady economic growth and continued monetary accommodation by the Federal Open Market Committee drove stocks to new highs in the fourth quarter--2013 was the best year for equity investors since 1997. The FOMC began to taper bonds at its December meeting, which led to a prompt sell-off. We believe the yield curve will begin to flatten as we move into the year, which will contribute to raising mortgage rates.

Learn more about how the economy fared in the fourth quarter of 2013 and what's ahead for 2014 by reading my latest Investment Overview.