Seeking Alpha

FOMC expected to taper further at meeting

The FOMC is due to start the first day of a two-day meeting today, with WSJ Fed watcher Jon Hilsenrath believing that the bank will ignore the turmoil in emerging markets and cut its bond-buying program by another $10B a month to $65B.

Firstly, it's not clear that the sharp declines in Turkey's lira and Argentina's peso, for example, are due to the Fed's decision to taper, especially because both countries have deep domestic problems.

It's also not certain that the overseas rout is a problem for the U.S. economy, which is what the Fed is mandated to consider.

Comments (5)
  • el stevadore
    , contributor
    Comments (143) | Send Message
    big questions that i believe very few people are qualified to answer, certainly not me. i'll be forced to resort to technical analysis to tell me what to do and let the news scurry around to find an explanation for after the fact.
    28 Jan 2014, 06:30 AM Reply Like
  • mikecao
    , contributor
    Comment (1) | Send Message
    tapering is definitely still going ahead...
    28 Jan 2014, 07:02 AM Reply Like
  • snoopy44
    , contributor
    Comments (1121) | Send Message
    they made a massive mistake by starting the taper prematurely. There was absolutely no pressure to begin before Yellen had a chance to get her feet wet. They needed to get 2-3 more months of data showing progress on the jobs, GDP fronts. By not waiting they have exacerbated the global strains affecting EMs. I think they panicked when they saw their balance sheet balloon to over $4 trillion. Now their credibility is on the line. The tapering genie is out of the bottle. They can't go back. Bernanke has backed Yellen into a corner and given her very few options to keep the recovery alive.
    28 Jan 2014, 08:17 AM Reply Like
  • Regarded Solutions
    , contributor
    Comments (19071) | Send Message
    hmmmm, one guys opinion, and I think he has it wrong.
    28 Jan 2014, 08:21 AM Reply Like
  • minecanary
    , contributor
    Comments (799) | Send Message
    Agreed. The Fed's job is to make sure the gov't can spend like mad without any elected officials making hard choices, deliver huge bonuses to the bankers via stock bubbles, and to make sure the sheeple don't believe metals are real money. Taper prematurely? If it hasn't worked in 5 years, it's not going to. Only 4 least admitted to. Pretty soon we'll be talking about real money. There is no recovery - just the biggest pile of funny money in history.
    28 Jan 2014, 08:55 AM Reply Like
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