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Traders and executives from AMC Entertainment wait to see the final pricing of the companies IPO on the floor the New York Stock Exchange December 18, 2013.
Traders and executives from AMC Entertainment wait to see the final pricing of the companies IPO on the floor the New York Stock Exchange December 18, 2013.
(LUCAS JACKSON/REUTERS)

Why markets are rallying on the Fed - and how economists are reacting

The Federal Reserve surprised many observers with its decision on Wednesday to taper its monthly bond purchases starting in January, marking the beginning of the end for a key stimulus program that has been very, very good to stocks over the past several years.

But while the timing of the move was a surprise, just about everyone expected the Fed to cut back on bond purchases – known as quantitative easing or QE – within the next few months. The size of the taper, $10-billion (U.S.) from total purchases of $85-billion per month, was also expected. And, the Fed balanced the stimulus removal with some assurances.