The FOMC minutes and economic projections did nothing to clear the air about tapering. Instead, they added fresh uncertainty and volatility.
The problem is that you have these two statements. Although they’re not completely contradictory, it’s challenging to reconcile them.
Minutes
Many members indicated that further improvement in the outlook for the labor market would be required before it would be appropriate to slow the pace of asset purchases. Some added that they would, as well, need to see more evidence that the projected acceleration in economic activity would occur, before reducing the pace of asset purchases.
Projections
About half of these participants indicated that it likely would be appropriate to end asset purchases late this year. Many other participants anticipated that it likely would be appropriate to continue purchases into 2014.
Thankfully, the Fed Chairman delivers a speech at 2110 GMT and will answer questions. The market is on eggshells now and whatever he says is likely to spark another wild move.