Ask an expert: Why the Fed is in a tough spot
MSN Money's Anthony Mirhaydari explains the central bank's options given the mixed economic signals and how markets might react to its next move.
In the video below, MSN Money's Anthony Mirhaydari explains the Fed's options and how markets might react. While the Fed is widely expected to taper its $85 billion a month bond-buying program, investors want to know not only whether the Fed would reduce the monthly purchases of Treasurys, but also by how much.
As Mirhaydari explains, the markets have been reacting wildly to the Fed possibly pulling back on its cheap money stimulus because markets have been feeding on it. And expectations are just as varied as well, from no tapering to a $10 billion cutback to more.
As for the economy, it doesn't necessarily support a pullback because data have been mixed. Some areas show strength, while others remain weak. Meanwhile, it's possible the Fed could miss its inflation target if it waits too long to taper.
The discussion about the possible tapering of the Fed's stimulus program and its effects on the market continues over at MSN Money's Facebook community.
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