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QE tapering or not?
May 20th, 2013 9:07 AM

the following article may explain the recent higher interest rates:

Whether or not it turns out to be justified, hype and anticipation
have been building over this week's FOMC Minutes for over a week now. 
The hype concerns the notion that the Fed Minutes will show a Fed board
that is somewhat closer to tapering QE3 than the current market consensus
might suggest.  Recent Fed speakers, though not all of them, have added
to the hype by suggesting tapering could begin this summer.  Some of
them have rested their hats on the verisimilitude of a housing recovery,
saying it makes more sense to pull back onMBS first if housing is heating
up. 

The other side of last week's coin and of the hyper in general, is the
possibility that the Minutes show broader consensus that things are as
they should be--that is to say the FOMC is "staying the course" on QE
and needs to see "more" before scaling back on bond buying programs. 
There really hasn't been much reason to doubt this would be the case,
but a few seeds of fear have been planted, and now even the skeptics
must wait for Wednesday, just in case they're wrong.

So the rate might be lower after Wednesday's FOMC meetings.


Posted in:General
Posted by Eric Fang on May 20th, 2013 9:07 AMPost a Comment

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