Taper Tantrum

For the Fed to taper their purchases of Treasuries and MBS, GDP growth needs to be above 2.5%, net new job growth needs to approach 200,000/month, the annual inflation rate should be nearing 2%, and the unemployment rate should be below 7.3%. These thresholds are still a ways off. Thus, the probability of a December taper is just 15%, but it is highly likely that tapering will commence by March.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.