Fed's Clarida drops clues on what to watch for hints of asset purchase taper ahead

Richard Clarida is Vice-Chair of the Federal Reserve System

Earlier remarks:

• Fed's Clarida talks about the new policy framework

• Fed vice-chair Clarida says Fed rates will be lower for longer, will delay lift-off

Drops this now:

• SEP projections and Chair's press conference will provide information on whether economy has progressed enough to review asset purchases

(SEP is Summary of Economic Projections, these are issued at FOMC meetings, although not every meeting)

So, two places to go looking for clues. The next FOMC meeting is April 27-28 (no SEP). After that, June 15-16 (Yes, SEP update at this meeting). The June meeting could be a big one .... according to investment managers BlackRock (posted yesterday) :

• We think that the Fed should be able to begin to taper asset purchases sooner than many expect, and perhaps by the end of the year, or early next yea ... there may be a hint of this in Fed communications as early as the June FOMC meeting

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Clarida also says:

• to get sustained inflation need to see wages in excess of productivity
• expect similar sequencing to bond purchase reductions versus interest rate increases as in 2014 to 2015 cycle