This article (in the gated Wall Street Journal – try a news search on the headline) first appeared a little earlier as a blog piece, so its not entirely new, but now its made a leap into the news section and is more detailed.
- Concerns are growing over how long the Fed will keep buying Treasury bonds:
recent data showing improving U.S. labor and housing markets, investors have been selling these haven assets.
Any talk of reining in the Fed purchases will hit a nerve with bondholders.
There is a 2 day FOMC meeting this week – the statement is scheduled for Wednesday at 2.15PM Eastern Time (1915GMT). I’m not expecting any significant change from the Fed’s threshold’s guidance:
“[The FOMC] anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored. The Committee views these thresholds as consistent with its earlier date-based guidance.”
(From the December FOMC statement)
