Fed Tapering to be Linked to Economic Indicators

Ben Bernanke emphasized in his second day of Congressional testimony that monetary policy will not be tighter for the foreseeable future and that it’s too early to tell when tapering will begin.

“We have not changed policy. We are not tightening policy,” Bernanke said during the question and answer session. He added that none of what the Fed has communicated about winding down its bond purchases implies tighter policy any time soon.

Bernanke again tried to draw the distinction between paring back bond purchases and raising interest rates, implying that policy will remain accommodative even if the Fed ends quantitative easing since rates will remain near zero.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza