Confusion About the Fed's Bond-Buying 'Taper' Roils Wall Street

Confusion about the Fed slowing its $85 billion in monthly bond buying is roiling the markets
Traders work on the floor of the New York Stock Exchange Photograph by Spencer Platt/Getty Images

When Federal Reserve Chairman Ben Bernanke answered Congress’s questions on May 22 about when the central bank might begin to slow down its monetary stimulus program, his words were measured. “If we see continued improvement and we have confidence that that is going to be sustained, then we could—in the next few meetings—we could take a step down in our pace of purchases,” he told the Joint Economic Committee. He also warned that “premature tightening” could “carry a substantial risk of slowing or ending the economic recovery.”

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