Comments from the Fed’s George:
- Would like to see pace of bond buys gradually decline, end in first half of 2014
- It’s time to begin ‘gradual and predictable’ normalization of monetary policy
- Warns tapering may bring volatility but that’s no reason to postpone
- Fed could include more information about its projections for future rate moves
The arch hawk at the Fed is only talking about a $15 billion taper so you can probably forget about anything larger than that. Looks like the debate will be between $10 billion and $15 billion.
The last point is also important because the Fed could combine tapering with more dovish forward guidance. There will be much more debate about that in the week ahead, I expected.
