Bernanke Seeks to Divorce QE Tapering From Interest Rates - Bloomberg

Bernanke Seeks to Divorce QE Tapering From Interest Rates - Bloomberg

“The Fed’s bifurcated message will continue,” said Michael Gapen, senior U.S. economist at Barclays Plc in New York and a former Fed economist. “Their outlook is for an environment where we can start tapering -- so a hawkish tone on tapering switching to a dovish tone on rate hikes.”
Investors in federal funds futures are starting to absorb Bernanke’s message. They see a 44 percent chance that the central bank will raise interest rates from close to zero before the end of 2014, according to data compiled by Bloomberg. That’s down from 53 percent on July 10, the day before Bernanke said “highly accommodative monetary policy for the foreseeable future is what’s needed in the U.S. economy.”