Yesterday Turkey’s central bank hiked rates dramatically to bring about support for the Lira.

Yesterday Turkey’s central bank hiked rates dramatically to bring about support for the Lira. After a short rally, the Lira fell along with other emerging market currencies and the European markets. It seems as if investors don’t care if local rates go up, they just want to flee emerging markets. Turmoil in emerging markets didn’t stop the Fed from trimming its bond buying stimulus. Yesterday, the Fed announced a further $10 billion reduction in its asset purchase program. Beginning in February, the Fed will buy $65 billion of bonds per month vs. the current buying of $75B per month. Even if unemployment falls to the 6.5% threshold, Fed officials will continue to keep rates near zero as long as inflation stays within the 2% target range. Gold saw minimal gains from this news as markets expected this to occur. Perhaps if the Fed had taken a different course of action yesterday, the markets would be more befuddled. Initial Jobless Claims for the week ending 1/25 are up 19,000 with a result of 348,000. GDP (4Q) grew at 3.2% vs. third quarter’s rate of 4.1%. Have a wonderful day!