Get ready, here it comes: A December taper
By: Steve Liesman
Tuesday, 10 Dec 2013
It increasingly appears that tapering is coming at the Fed’s meeting next week.
While forecasting the central bank’s moves has been an uncertain proposition for most of the past several months—with the conventional wisdom having it wrong in June and September—several of the Fed’s own financial tests for reducing its asset purchases look to have been met as it heads into the Dec. 17 meeting. Those include confidence in the outlook, an easing of fiscal drag and uncertainty, and what the Fed sees as more appropriate interest rates.
To be sure, the Fed could decide to wait another month for even greater clarity, and practically, many Fed officials see little difference in a taper program that begins in December versus January.
But it looks as if the three tests for tapering have nearly been met.