Stocks Tumble After Fed Announces It Will Reduce Daily Treasury Purchases From $75BN to $60BN Per Day

After desperately trying to ramp to green, stocks are tumbling (along with bond yields) after The Fed confirmed that there is now a sudden shortage of bonds as demonstrated by the recent repo ops that saw zero submissions (as discussed earlier) forcing it to start cutting back, or tapering, its “unlimited QE” bond-buying next week.

Specifically, after continuing to buy $75BN in bonds through Wednesday, the Fed said it would reduce the amount to $60BN on April 2 and 3, with the assumption that this – or lower – is the number going forward.

But wait there’s more, because after buying $50BN in MBS, the Fed’s schedule now also shows a decline in MBS purchases going forward from $50BN to $40BN next week.

These cuts are summarized below:

Stocks are unhappy…

And bonds are bid with 10Y tumbling to 67bps…