Why Barclays analysts see a December taper, and Merrill Lynch sees January reduction
October 18, 2013, 11:44 AM
Getty ImagesFrom left, Yellen, Obama and Bernanke
Now that the U.S. has avoided defaulting on its debt, markets can return to a favorite obsession: the Great Taper Watch of 2013.
Although job gains have been somewhat lackluster, and Washington’s budget deal promises a return to fiscal drama in a few months, the Federal Reserve could start tapering its massive asset-purchase program this year, according to a Friday research note from Barclays analysts.
“We think the Fed’s taper decision will ultimately be tied to U.S. economic data and December remains the most likely timing for tapering,” Barclays analysts wrote, citing their expectation that job creation will strengthen.
A Financial Times article (registration may be required) lays out the case for a possible December Taper.