Bloomberg - “They have made a decision virtually to go in September unless the data disconfirms their expectations
Federal Reserve policy makers are ready to start tapering bond purchases in September after Chairman Ben S. Bernanke shocked markets by announcing a conditional timetable, said former Fed Governor Laurence Meyer.
Bloomberg - “They have made a decision virtually to go in September unless the data disconfirms their expectations of the continued improvement of the economy,” Meyer said of the Fed policy makers’ meeting on June 18-19. “That was the shock of the meeting to have a schedule thrown out at this time with three months of employment data still ahead.”
Enlarge image Former Fed Governor Laurence Meyer
Former Fed Governor Laurence Meyer Former Fed Governor Laurence Meyer Andrew Harrer/Bloomberg
Former Federal Reserve Governor Laurence Meyer said he sees "very little chance" that the start of tapering would be delayed beyond December.
Former Federal Reserve Governor Laurence Meyer said he sees "very little chance" that the start of tapering would be delayed beyond December. Photographer: Andrew Harrer/Bloomberg
Audio Download: Former Fed Governor Meyer Sees Fed Taper in Sept. If tapering does start in September, “why should there be any response? Everybody expected it,” Meyer said today in an interview on “The Hays Advantage” on Bloomberg Radio with Kathleen Hays and Vonnie Quinn.
The Fed has been making $85 billion in monthly bond purchases and holding the key interest-rate target near zero to spur job growth and faster U.S. economic expansion. The central bank will probably taper its asset purchases later in 2013 and may stop them around mid-2014 as long as the economy performs in line with the Fed’s projections, including a substantial improvement in the labor market, Bernanke said at a June 19 news conference.
After a slump following the Fed announcement, stocks gained last week as economic data indicated Fed policy makers can continue to provide additional stimulus to the economy.
These are the kind of little "news" gems they sneak in over holidays.
Let's try to think like a greedy GS bankster: if we think tapering our EASY MONEY might begin in September....what do we DO today? Calculate how much longer (and how much) we want to pump into assets that will be losing value? Skew (manipulate) the jobs & other numbers to insure 85bil continues for another 1-2%?
Wouldn't a greedy bankster who believes tapering is on the horizon start HOARDING the easy QE money ...and NOT be pumping so much POMO into an anticipated market decline...all the while positioning on the short side?
Everyone thinks POMO will save every day because Fed money through TBTJail has been holding the market up...but when the end of easy money is in sight the big boys will be holding onto every easy penny.
The market is approximately 6 months forward-looking...so it will begin to behave according to what is expected by EOY and early 2014...unless there is an unexpected "event".