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Trader expects ‘a kiss of taper’ from Fed

Tuesday, 27 Aug 2013 | 6:17 PM ET
Trader sees just 'a kiss of taper' ahead
Tuesday, 27 Aug 2013 | 5:02 PM ET
With the Federal debt-ceiling talks looming and the escalation of tensions in Syria, the Federal Reserve will likely reduce its asset purchases only slightly, Stuart Frankel's Steve Grasso says.

The Federal Reserve was unlikely to cut off its $85 billion-per-month of asset purchases just yet, Stuart Frankel's Steve Grasso said Tuesday.

"It would be impossible in my mind to do that with debt-ceiling talks, with Syria coming down the pike right now," he said. "It would be impossible with the market sliding to do anything but a little bit of a kiss of taper, just a point, just a sniff of taper. But besides that, I think it's off the table. I think there's other pressing things that are going on."

Stocks closed sharply lower, with the Dow Jones Industrial Average dropping to a two-month low.

(Read more: Stocks end near lows, Dow skids over 150 as Syria fears escalate; Vix spikes 12 percent)

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On CNBC's "Fast Money," StockMonster's Guy Adami said that the market's moves lower makes the reduction of quantitative easing unlikely.

"I think this puts the Fed on back burner," he said, noting that the S&P 500 had stopped at its technical resistance level. "I think we bounce from here."

(Read more: Forget Syria, the market was due for a pause: Josh Brown)

Tim Seymour of EmergingMoney.com noted that stocks bounced last time they hit their 100-day moving average.

"Ultimately, a lot of people are questioning where the growth is going to come from, ever though I don't think the Fed gives you back that carrot," he said. "I don't see why anything has changed today."

By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro.

Trader disclosure: On Aug. 27, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long MSFT; Guy Adami is long AGC; Guy Adami is long NUE; Guy Adami is long BTU; Tim Seymour is long BAC; Tim Seymour is long SBUX; Tim Seymour is long POT; Josh Brown is long DDD; Josh Brown is long AAPL; Josh Brown is long VAW; Steve Grasso is funds long MU; Steve Grasso is long BA; Steve Grasso is long BAC; Steve Grasso is long BBRY; Steve Grasso is long GDX; Steve Grasso is long GOOG; Steve Grasso is long HERO; Steve Grasso is long HPQ; Steve Grasso is long MHY; Steve Grasso is long LNG; Steve Grasso is long MJNA; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long QCOM; Steve Grasso is long S; Steve Grasso is long ASTM; Steve Grasso is long POT; Steve Grasso is long DECK; Steve Grasso is long DHI.

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