EDIT Monday morning: I’m renewing this post at the top of the page. Hilsenrath’s article came out after the close on Friday so there may be many who haven’t seen it.
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The long-awaited, much-talked about article from Jon Hilsenrath has been published in the Wall Street Journal. Its headlined: Fed Maps Exit From Stimulus
The article isn’t as paradigm-shifting as expected, note what he says here (my bolding):
Federal Reserve officials have mapped out a strategy for winding down an unprecedented $85 billion-a-month bond-buying program meant to spur the economy—an effort to preserve flexibility and manage highly unpredictable market expectations.Officials say they plan to reduce the amount of bonds they buy in careful and potentially halting steps, varying their purchases as their confidence about the job market and inflation evolves. The timing on when to start is still being debated.
Its the timing question that we’re all waiting on, and the article provides no timeframe.
Hilsenrath goes on:
The Fed’s strategy for how and when to wind down the program is of intense interest in financial markets.
Yes, indeed it is.
While the strategy being debated leaves the Fed plenty of flexibility, it might not be the clear and steady path markets expect based on past experience. Officials are focusing on clarifying the strategy so markets don’t overreact about their next moves.
Yes, makes sense.
But, timing … what about the timing?
The link is here: Fed Maps Exit From Stimulus (The Wall Street Journal is often gated, so if you’re unable to access the article try a a Google news search using the headline) (ADDED: here’s a link to the article that is NOT gated)
