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When The "Market" Thinks The Taper Will Begin?

Tyler Durden's picture





 

With the return of Federal Reserve Chair(wo)man odds at PaddyPower (leaving Summers a dreary 28% likelihood of winning) comes the Irish bettors' latest gamble... when will the US Fed initiate Tapering of QE? Based on the month during which the first reduction of QE bond-buying from the current $85bn per month, it seems (unlike the majority of prognosticators and standing blithely in the face of technical, political, and deficit reasons) that tapering will not begin until December at earliest with most believing 2014-or-later...

 

 

(Note: the probabilities do not add to 100% since this is a market-implied measure - i.e. risk-neutral probabilities - for the purists, but translating to real-world probabilities does not change the ordering)

 

And here is what the 'street' thinks (via Bloomberg)...

Viewpoints on prospects for QE tapering since Fed’s July 30-31 meeting and July payrolls data, based on published research and interviews.

 

  * Barclays
    * Fed’s dovish statement doesn’t preclude Sept. taper

 

  * Capital Economics
    * Fed statement doesn’t change Sept. tapering

 

  * CRT Capital
    * Jobs data won’t derail Fed tapering

 

  * GMP
    * Payrolls report doesn’t change taper start in Sept.

 

  * MFR
    * Fed could delay tapering without Aug. jobs rebound

 

  * Miller Tabak
    * U.S. jobs data “within ballpark” for tapering

 

  * Newedge
    * July jobs data “mixed bag” for Fed

 

  * Pimco
    * Fed likely to still taper in Sept.

 

  * RBS
    * Fed is still “on rails” for Sept. tapering

 

  * SocGen
    * Payrolls report not likely to change Fed taper timetable

 

  * TD
    * Jobs data doesn’t mean Sept. tapering move will be delayed

 

So it seems September is "street's" best guess...

 


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