“Bernanke has said the Fed may start reducing $85 billion in monthly bond purchases later this year, assuming economic growth meets the Fed’s predictions. At the same time, policy makers’ forecasts have indicated the federal funds rate won’t rise until 2015, long after Bernanke’s second term ends Jan. 31,” according to the report.
“The Fed’s bifurcated message will continue,” said Michael Gapen, senior U.S. economist at Barclays, in the article. “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.”
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Full disclosure: Tom Lydon’s clients own TLT.