Note to markets: it’s been September all along for the Fed taper
Now that the outcome of one of the most anticipated Federal Reserve monetary policy meetings in history is just hours away, most investors and traders have settled on the view that the central bank will announce a plan to trim the pace of its $85 billion in monthly purchases of government and mortgage-backed securities on Wednesday. We just don’t know which, if any, of the two asset classes it will focus on, and by how much it will taper what it buys each month.
What most probably don’t know is that for all the incessant talk in financial markets over the past few months about uncertainty, the timing hasn’t really been in question. The consensus of forecasters polled by Reuters has been pretty clear since Fed Chairman Ben Bernanke hinted in May that quantitative easing might have to slow later in the year.