With the return of Federal Reserve Chair(wo)man odds at PaddyPower [8] (leaving Summers a dreary 28% likelihood of winning) comes the Irish bettors' latest gamble... when will the US Fed initiate Tapering of QE? [9] 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 [10], political [11], and deficit reasons [12]) that tapering will not begin until December at earliest with most believing 2014-or-later...
[13]
(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...