September 2013 Macro Pulse -- Taper Off (For Now)

The Federal Reserve finally laid to rest speculation about whether it would begin scaling back (a.k.a., “tapering”) its $85 billion in monthly purchases of Treasury bonds and mortgage-backed securities during September. On September 16, Fed Chair Bernanke said that, although the U.S. economy is growing moderately and some indicators of labor market conditions have improved, rising mortgage rates and government spending cuts are restraining growth.

If the Fed maintains its key short-term interest rate near zero until unemployment falls to 6.5 percent, the ongoing “extraordinary” monetary policy could be kept in place until late 2014. During the press conference announcing its monetary policy plans, Bernanke also revealed the Fed had once again nudged its economic forecast lower for 2013 and 2014. One can infer that the U.S. economy is weaker than what some recent economic reports might suggest. 

Some of those reports are discussed here. (Click to read the entire September 2013 Macro Pulse recap.)

The Macro Pulse blog is a commentary about recent economic developments affecting the forest products industry. The monthly Macro Pulse newsletter summarizes the previous 30 days of commentary available on this website.