It's clear the Fed wants out of QE, says Bill Gross, appearing on Bloomberg Radio following the big jobs number beat. He puts the odds of the taper beginning in December at 50/50.
He adds that yesterday' fast GDP number combines with today's jobs print gives the FOMC the excuse to transition from QE to forward guidance. Earlier this week, San Francisco Fed chief and Yellen ally John Williams suggested the same thing, and floated the idea of the Fed altering said guidance to prove to markets it's in no rush to hike the Fed Funds rate.
Treasurys have gained back some of their knee-jerk losses following the report, but the 10-year yield remains 2 basis points higher on the session at 2.9%. The Dec 2016 Eurodollar contract is off 6 bps to 97.88, suggesting a Fed Funds rate then about 200 basis points higher than it is today.
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