The tone of the October FOMC minutes is in line with Bernanke’s comments yesterday night and to the hawkish side of market expectations. The minutes underline that tapering could very well begin within one of the next few meetings IF economic data continue to develop along the line of the FOMC projections. This is no surprise, but it is interesting that the minutes notes that OTHER reasons than labour market improvement could give ground for scaling down asset purchases. This is in line with Bernanke’s comments that there are costs of QE and that these increases with the size if Fed’s balance sheet. This leaves the impression that the FOMC wants to get out of QE as soon as possible.
Read the full report: Market Talk