The Federal Reserve is in the early stages of a campaign to ready markets for reducing its $120 billion in monthly asset purchases to stimulate the economy. … This time, the Fed is creating a long runway for tapering, making clear that rate increases only come after this process. It also has set a higher standard of economic improvement required for rate increases than it has for asset purchase reductions. [Fed Vice Chair for bank supervision Randal] Quarles late last month made that separation clear, saying: “It will become important for the FOMC to begin discussing our plans to adjust the pace of asset purchases at upcoming meetings.” But, he added, “in contrast, the time for discussing a change in the federal funds rate remains far in the future.”
Source: CNBC
