This morning Janet Yellen has her confirmation hearing where she makes prepared remarks (click here for pre-released statement … ya ya we are nerds) and will answer questions concerning her possible nomination as FOMC chair. All eyes will be on her for an inclination of future stimulus slowing AKA taper.
Little Known FED Ritual That may extend Stimulus
As a courtesy, the outgoing FOMC chair does not attend her/his final board meeting and allows the vice chair to run the meeting. The lame duck chair essentially hands off the responsibility early in his or her absence.
Big Ben’s (Bernanke) last absent meeting will be January, making the December meeting the last fully attended meeting. Most likely there will be no moves in December due to seasonality AND lack of data to push them.
March 2014 at the Earliest
Fast forward to January 2014, no Ben, temporary chairman, no moves …. most likely.
Bottom line, this little known ritual/courtesy most likely puts taper actions off until March at the earliest. Of course there will be much chatter all along the way.
Hope you enjoyed the exposure of the little known ritual/secret that may extend the Fed’s stimulus.
Have a Great Day!
John Kvale CFA, CFPhttp://www.jkfinancialinc.com http://www.street-cents.com 8222 Douglas Ave # 590 Dallas, TX 75225