Temporary maneuvers in a terminal situation

The minutes did note a joint session being held between the Federal Open Market Committee and the Board of Governors where the “eventual normalization of the stance and conduct of monetary policy” was discussed. However, those were said to have been undertaken as part of prudent planning, while stressing that it “did not imply that normalization would necessarily begin sometime soon”. Moreover, the mere idea of "starting to consider the options for normalization at this meeting" was described as prudent, while suggesting the first steps in normalizing policy have yet to become appropriate. At the bottom line, the minutes stressed the fact that no decisions regarding policy normalization were taken, while meeting-participants noted that "it would be helpful to continue to review these issues at upcoming meetings". In conclusion, the Fed managed to assure markets it was attending to the question of when it will increase interest rates, it is simply too early to disperse any information regarding when that will actually happen. It managed to avoid a bullet in the sense that unlike previous comments on the matter, this time no turbulence was witnessed in interest, and subsequently all other, markets, with the release of the minutes. However, the mathematical fact outlined above regarding the imminent end of tapering still holds. The Fed can try using temporary maneuvers in what is essentially a terminal situation, but it will have no alternative rather than changing its strategy at some point. Start Trading HERE!