Tapering or Not Tapering?
This week I feel like the entire world is waiting for Ben Bernanke's announcement of the monetary policy decisions. So, is a tapering likely this month? No! I do not think so. Three reasons: [1] Inflation expectation are well anchored (see Cleveland Fed ) [2] Inflation is low [3] Although unemployment declines, it still can get better. [4] Real investment growth rate is not that remarkable. Overall, inflation , i.e. half of the FED's d ouble mandate , is low (perhaps, dangerously low) while unemployment , i.e. the other half , remains high and declines dully. That is to say there is no reason for tapering now