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The clock is ticking. It’s going to be September in two weeks’ time, the month when the Fed is going to decide whether it will reduce its asset purchases or not.

For the majority of market participants, the expectation is that Septaper, or the Fed’s reduction of its asset purchases in September, is a done deal. However, there are a few who think that Septaper is too soon. Did the latest FOMC meeting minutes provide any clues? Let’s take a look at both sides of the coin.

To Septaper…

Perhaps the most solid argument for the Fed to reduce its $85 billion monthly bond purchases is the strengthening job market. If you recall, the labor report for July showed that even though payrolls only expanded 162,000 (weaker than the 184,000 forecast), the percentage of people without jobs fell to 7.4%, its lowest level in more than four years.

According to the latest FOMC meeting minutes, the central bank took it as a sign that the job market is picking up. In fact, the actual words used were, “the outlook for the labor market has improved substantially.”

In addition to the positive forecast, many policymakers expressed that they were comfortable with the schedule of tapering. They said that it “might soon be time” to slow purchases before the year ends.

Or not to Septaper?

As I mentioned in a previous post, U.S. inflation is still well below the Fed’s 2% target, which gives the central bank room to get creative in stimulating economic growth. Moreover, the recent increases in mortgage rates and Treasury yields are giving the Fed incentive to wait for the markets to calm the heck down and emphasize that tapering is not tightening.

Some of my more Septaper fanatic homies dug a little deeper in the Fed’s latest minutes and pointed out that while many members are comfortable with tapering later this year, a few are still willing to wait for more positive economic reports.

Others also noted that the FOMC’s tone doesn’t seem to signal that a big change is coming next month. In fact, some are even saying that Bernanke could wait the year out and let the new Fed head honcho announce the Fed’s tapering plans!

While the latest FOMC minutes supports a possible Septaper, it also doesn’t make it a done deal. In fact, more and more market players are betting that while tapering is still on the table, it probably won’t happen next month. What do you think?