The Federal Reserve will issue its latest decision on interest rates and its economic outlook later Wednesday as it concludes a two-day meeting.
Investors are keen to get clues on when the central bank will begin tapering its massive $85 billion-per-month bond-buying program -- better known as quantitative easing, or QE3.
Mark Vitner, senior economist at Wells Fargo said he expects the Fed to announce its plan to rein in the bond-buying program in October. Vitner anticipates the Fed will draw down the buybacks to $75 billion by November, and eventually whittle them down to zero by September 2014.
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Vitner said bond yields have already priced in tapering and said short-term rates will head higher.
“The first increase in interest rates is likely to be further off than people think,” said Vitner. He’s expecting the first interest rate hike to be pushed out to late summer or early fall 2015.
Investors will get further clues to the state of the economy later this week with the release of the monthly labor report.
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