If payroll growth during the summer holds up
at this pace, we could see the Fed consider tapering the pace of
purchases in the fall. If payroll growth materially worsens (say to
50,000 or worse), then we could see the Fed increase purchases.
The Fed wants to make sure the economy holds up under the Sequester. Last week, New York Fed President William Dudley (a voting member of the FOMC) stated that it would take about the 3 to 4 months to see how the economy absorbs the fiscal drag. Bernanke wants to make sure that the economy is on a sustainable path before he begins to wind down quantitative easing (QE). Watch the data.
The Fed wants to make sure the economy holds up under the Sequester. Last week, New York Fed President William Dudley (a voting member of the FOMC) stated that it would take about the 3 to 4 months to see how the economy absorbs the fiscal drag. Bernanke wants to make sure that the economy is on a sustainable path before he begins to wind down quantitative easing (QE). Watch the data.
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