The word of the moment is “taper” as in “when will the Fed begin to taper its monthly purchases of bonds as part of quantitative easing.”
The question is consuming market talk, as interest rates and the dollar rise.
There’s an increasingly widespread belief that the taper begins sometime this year.
It may even be in the next few months.
While Goldman Sachs’s forecast remains for Fed officials to wait until December before slowing their $85 billion of monthly asset purchases, Hatzius said yesterday that so-called tapering could occur sooner.
“A September tapering is certainly possible, I think that is going to depend on the data,” Hatzius said in a Bloomberg Television interview at Goldman Sachs’s Global Macro Conference in London.
Since this question is likely data dependent, the attention paid to the next few job numbers will be significant.
The next one, of course, comes this Friday.
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