However, Friday’s lackluster jobs report, downward revisions and falling labor participation rate put those expectations in doubt.
“The Fed is certainly going to want to get more information before they make this move, particularly given how violent the financial-market reaction has been to tapering,” said Julia Coronado, based chief economist for North America at BNP Paribas, in a Bloomberg report. “You’re not going to play Russian roulette with the U.S. economy and risk another backlash in interest rates.”
“Even the Federal Reserve would conclude that the employment trend is moderating and for that reason alone they probably will have second thoughts about tapering bond purchases this month,” added Cary Leahey, senior advisor at Decision Economics, in a Reuters article.
Full disclosure: Tom Lydon’s clients own TLT.