• No one is getting excited about the FOMC meeting tonight, which is exactly Powell & Co’s plan. By choreographing and telegraphing the taper well in advance, the Fed hopes the nominally tighter monetary policy will at best tighten financial conditions only marginally.
  • Expect Powell & Co to lay out the basics of their tapering plans tonight, with the plan formally announced in November if the US economy continues to perform broadly in line with recent developments (= continued above potential growth) and if events do not intrude. A six-month taper should be in the ballpark, with a December or January launch date. The taper could last a few months longer though.

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