From the Wall Street Journal’s Jon Hilsenrath over the weekend: Forget Fed-Speak, Look for the Latest Growth View (The Wall Street Journal is often gated, so if you’re unable to access the article try a search of Google news using the headline)

Says

  • Fed officials are unlikely at this (week’s) meeting to change their $85-billion-per-month bond-buying program
  • But what they say about the economy will send important signals about what they expect to do in the future

The article goes on:

  • The Fed’s forecasts for the economy are more optimistic than consensus
  • The Fed’s latest growth projections for GDP (made in March) average 2.6% for 2013 and to 3.2% for 2014, compared to a Wall Street Journal survey of economists at 2.3% this year and 2.8% for 2014

Says Hilsenrath (the article is co-written with Phil Izzo):

  • If the Fed “maintain confidence in their economic forecasts, it could signal they think they’re on track to begin pulling back the program later this year”

So, what Hilsenrath/Izzo is saying is to watch the economic projections made by the Fed as an indicator of when the winding back of asset purchases is likely to begin.

Current market talk has the scaling back likely to begin in September of December; it is data-dependent, of course, currently December seems the more likely alternative.