Fed taper prompted earlier tightening expectations – Fed study

A study from the San Francisco Fed showed the Fed’s December taper brought forward expectations for when the FOMC will first hike interest rates.

The market now expects the Fed to start hiking in Spring 2015 yet the exact timing is ‘highly uncertain’. They looked at the yield curve and polls.

Hilsenrath wrote last week about how much of the implied tightening has unwound lately with officials continually repeating that tapering does not equal tightening or rate hikes.