Interesting article from CNBC economics correspondent Steve Liesman:
Both on the sidelines and in public at this year’s economic symposium in Jackson Hole, Wyo., Fed officials suggested that a September taper is more likely than not. While nearly everyone insisted that a decision to reduce the asset purchases under quantitative easing depends on incoming economic data—especially the August employment report—they also implied that the burden is on the economy to prove why the Fed should not taper.
Liesman suggests that it would take a sharp downturn in economic data to convince the Fed not to taper. He also had this interesting tidbit, which also points to a Fed taper:
Officials suggested that it’s a matter of credibility for the Fed to follow through on what it had told markets.
Liesman is unpopular because of his frequent clashes with ravin’ Rick Santelli on air but I believe Liesman has better access to the Fed than WSJ Fedwatcher Jon Hilsenrath. The near-term event to watch is Q2 GDP revisions on Friday. The Fed would be more comfortable if growth was bumped up to 2.2%, which is the consensus call.
