With Fed taper decision looming, here's the market consensus

09/18/2013 1:53 pm EST


Jim Jubak

Founder and Editor, JubakPicks.com

We’re about 30 minutes away from the 2 p.m. ET press release from the Federal Reserve’s Open Market Committee and an hour away from the 2:30 press conference.

Here’s what market consensus expects at the moment:

  1. A taper of $10 billion to $15 billion. That would reduce the Fed’s monthly purchase of Treasuries and mortgage-backed securities to $70 billion to $75 billion from the current $85 billion.

  2. With the housing sector showing some weakness, markets expect the bulk of the taper to come from reductions in the Fed’s purchases of Treasuries and expect the central bank to keep the levels of purchases of mortgage-backed securities at roughly current levels.

  3. A clear statement that the Fed intends to abide by its promise of keeping current extraordinarily low short-term interest rates of 0% to 0.25% at these low levels until 2015 or so.

Stay tuned.

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