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Economy

FOMC Outlook Watch: More Tapering AND Slower Growth in 2014

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By Jon C. Ogg Published
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Federal Reserve

The Federal Reserve’s Federal Open Market Committee has another meeting this week regarding U.S. interest rate policy. While no new rate announcement is expected to come, what is expected is the announcement of more tapering — some $10 billion by our take.

Janet Yellen and other Fed presidents have said on many occasions that they are comfortable with the $10 billion incremental notch in monthly bond buying. Most likely that will take place with another $5 billion less in Treasury buying and another $5 billion less in mortgage backed securities.

Investors also will need to remember that this is a two-day meeting, starting on Tuesday morning and ending with the formal announcement (statement) around 2:00 p.m. EST on Wednesday.

We will be watching for changes in how the Fed’s characterization of the economy, as well as changes in guidance, because the quarterly forecasts will be released on Wednesday as well. Look for a slightly lower growth forecast, but one that still allows for the bond tapering to continue.

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About the Author Jon C. Ogg →

Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.

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