The beatings will continue. The Fed's biggest challenge today is credibility, says Chicago Fed boss Charles Evans, who wants to be crystal clear: The central bank will continue to be accommodative until it gets the economy it wants. Citing a "shocking amount" of fiscal restraint, Evans says 2013 growth is likely to fall short of expectations.
He does tip his hand on the taper, suggesting the Fed is likely to buy $1.5T in assets under QE3. With $1.1B already purchased and assuming another $85B this month and December, it suggests a fairly rapid pace of tapering next year.
"I'd like you to do a lot more lending," Evans tells his audience of Illinois bankers.
A first as far as we know, the Chicago Fed is live-tweeting the Evans speech.
Treasury yields continue higher on the session, the 10-year up 5 bps to 2.72%. TLT -0.9%.
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