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These Are The Fed’s Options To Avoid Another Taper Tantrum

" The 2013 “taper tantrum” also provides a reminder that the impact of balance sheet policy on financial conditions is uncertain and could be larger than our baseline estimate. We doubt the impact would be as large today—in 2013 markets misunderstood tapering as implying earlier rate hikes, whereas today markets would likely view earlier tapering as implying later hikes— but the risk is worth considering"

" The 2013 “taper tantrum” also provides a reminder that the impact of balance sheet policy on financial conditions is uncertain and could be larger than our baseline estimate. We doubt the impact would be as large today—in 2013 markets misunderstood tapering as implying earlier rate hikes, whereas today markets would likely view earlier tapering as implying later hikes— but the risk is worth considering"
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2 comments on “These Are The Fed’s Options To Avoid Another Taper Tantrum

  1. Timothy Barnes

    Curious on how you see the balance sheet the Fed is managing, and the debt ceiling being breached continuously by the US Government. At what point does the market turn on treasuries? With so much debt being accumulated and no plans to reduce that debt, how does the music not stop sometime? I’m fascinated at how this debt bubble continues.

  2. Viet Vet

    Also I am enthralled that a majority of this low yielding fixed income debt is bought by American citizens for their “future”.

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