Fed watcher predicts tapering
Fed watcher Jon Hilsenrath who’s believed to have insider connections in the FOMC, says that the Fed can reduce bond purchases to $65 billion a month on Jan. 29.
Hilsenrath thinks that even discouraging December jobs report won’t prevent the Fed from further tapering. Here’s his argumentation:
- According to interviews with officials and their public comments, the Fed expects solid growth in the US this year.
- Bernanke suggested at a December news conference that officials were inclined to continue cutting purchases in $10 billion increments at subsequent meetings as long as the economy keeps strengthening.
San Francisco Fed President John Williams said in January that the Fed’s likely continue on a path of gradual, measured reductions in the pace of purchases, assuming the economy tracks as expected.