US stocks, bonds slip after Fed cuts stimulus

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Higher interest rates are coming. Sooner than you think. That’s the message investors took away from the Fed. They sent stocks and gold prices lower and bond yields sharply higher. The Dow fell as much as 209 before erasing some of its loss. The Fed voted to cut its monthly bond purchases from $65 billion to $55 billion, as expected, saying the economy is recovering enough for it to ease off. The purchases are designed to keep long-term rates low. The Fed also said most of its policy makers think it’s appropriate to raise short-term interest rates starting in 2015, though the Fed later felt obliged to emphasize that would be an incremental process.

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