It seems not only the entire developed world is sick and tired of Hilsenrath's "leaks" which have now become so grotesquely self-contradictory, not even Hilsenfollowers can make out the Hilsenfact from the Hilsenjoke. So it appears the Fed has now picked the FT as its interim pass through vehicle:
Ben Bernanke is likely to signal that the US Federal Reserve is close to tapering down its $85bn-a-month in asset purchases when he holds a press conference on Wednesday, but balance that by saying subsequent moves depend on what happens to the economy.
The Fed chairman has a double communications problem. Markets seem reluctant to acknowledge the improvement that is leading the Fed towards a taper of QE3. But they also appear to be assuming, incorrectly, that any taper means the Fed has become less willing to support the economy’s recovery.
...
A couple of complications exist. One is unexpectedly low inflation. Most Fed officials are sanguine about the drop in their favoured measure of core inflation to 1.1 per cent. Expectations of future inflation are holding up and a similar slide in 2010 did not end in deflation despite a weaker economy. So far, it is a minor factor in the Fed’s calculations, although it will weigh more heavily if expectations move or inflation defies forecasts and stays low.
The other complication is the rise in bond yields, triggered by the confused market response to a likely Fed taper, which has in itself tightened financial conditions. Market movements are unlikely to delay a Fed taper – but they are likely to make it cautious until it has got its message across.
Read the full thing here [7].
and the market's reaction...
[8]