Fed will need to reassure the market it's not thinking about dialing back its support

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Markets figure that as long as the Fed keeps pumping, then it's safe to keep buying.

Powell and other central bank officials say they're committed to keeping the bond purchases going — and short-term borrowing rates anchored near zero — until the economy shows that it's strong enough to run on its own.

One key element to that is inflation, which the Fed wants to run consistently around a 2% level that it's missed for most of the last decade. Should inflation heat up, however, it eventually will force the Fed to tighten its policy. Part of that tightening would include reducing the $120 billion-plus pace of asset purchases – hence, the "taper" talk, and, more specifically, worries over a "taper tantrum." The market experienced just such a reaction back in 2013, when former Fed Chairman Ben Bernanke first raised the idea for the program that was happening then.

 

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Yes because the poor market is obviously in need of such reassurance with the theatrics we are seeing

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