Insights + Resources

The Fed’s Taper Rehearsal

May 24, 2021

The Federal Open Market Committee (FOMC) released the minutes of its April meeting last week. The report suggested that should the economy continue to make progress, it may be time to adjust the pace of the Fed’s monthly bond purchase program.1

With inflation appearing to accelerate, this is the first sign that the Fed is considering such a scaling back. While such a change might be inevitable, it comes with no timetable and no indication that tapering is imminent.

This doesn’t calm investors’ nerves. The markets had a quick reaction to the tapering chatter, but soon resolved. Memories cast back to the so-called Taper Tantrum of 2013, when the Fed similarly changed direction after years of boosting the economy with easy money. Such mini-dips have happened from time to time since then.2

It’s important to keep in mind that these “tantrums” are typically the result of the Fed being inconsistent or undisciplined with their messaging. When the chair or local Fed Chiefs speak, the market listens. When they say something that’s even interpreted as in a tapering mood, there’s an inevitable reaction.

Ultimately, the tapering will happen, though it’s possible that it may not come for quite a while. It’s a bit like the Sword of Damocles, complete with the sound of a ticking clock. It’s also possible that a slip of the tongue could inspire days of turbulence between now and then.

In addition to its other duties, the Fed has been given mandates of maintaining stable price levels and maintaining moderate, long-term interest rates. Your financial strategy has been crafted with the understanding that the Fed from time to time will make adjustments in interest rates to accomplish its goals. That said, whenever the news brings you questions or concerns, I welcome a chance to discuss them with you.

For more insights and resources, be sure to sign up for our Weekly Market Commentary. Follow our YouTube channel where we regularly post our Epic Market Minute videos. Follow us on LinkedIn, or like us on Facebook. And as always, please don’t hesitate to reach out to a dedicated service professional at Epic Capital.

Tags: ,

More Insights

Estate Planning – Protecting Your Assets
Jun 9, 2025

You’re beginning to accumulate substantial wealth, but you worry about protecting it from future potential creditors. Whether your concern is for your personal assets or your business, various tools exist to keep your property safe from tax collectors, accident victims, health-care providers, credit card issuers, business creditors, and creditors of others. To insulate your property … Continue reading “Estate Planning – Protecting Your Assets”

Estimating Your Retirement Income Needs
Jun 6, 2025

You know how important it is to plan for your retirement, but where do you begin? One of your first steps should be to estimate how much income you’ll need to fund your retirement. That’s not as easy as it sounds, because retirement planning is not an exact science. Your specific needs depend on your … Continue reading “Estimating Your Retirement Income Needs”

Market Update – Volatility Likely to Bring Opportunities as Trade Uncertainty Continues
Jun 4, 2025

As June begins, markets continue to navigate a complex landscape shaped by trade policy shifts, an uncertain economic and earnings outlook, and bond market headwinds. Several key developments in recent weeks may have implications for markets:

Market Update – Tariffs Bring April Showers
Apr 4, 2025

April showers came a month early as stocks fell in March. Tariffs were the primary cause of the market jitters, although that uncertainty became too much for markets to shrug off once economic data started to weaken.

Six Keys to Investing
Apr 2, 2025

A successful investor maximizes gain and minimizes loss. Though there can be no guarantee that any investment strategy will be successful and all investing involves risk, including the possible loss of principal, here are six basic principles that may help you invest more successfully.

Insights + Resources >