Economics
Fed Talk of Taper Rekindles Specter of Wrenching 2013 Tantrum
- Some Fed officials open to 2021 debate on paring bond buying
- Investors ‘won’t get fooled again’ as yield curve steepens
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Federal Reserve officials are beginning to split over when they may need to start pulling back on their massive monetary stimulus, drawing nervous glances from investors who remember how markets were roiled during the 2013 taper tantrum.
In the past week, four of the Fed’s 18 policy makers have publicly raised the prospect they may discuss reducing bond buying -- currently running at $120 billion a month -- by year’s end. In contrast, several others have called the debate premature and Fed Vice Chairman Richard Clarida, the most senior central banker to weigh in, has said he doesn’t expect any changes before 2022.