Ignore the 'Taper,' Focus on Fed Rate Hikes

The market reaction to the Fed's latest economic forecasts suggests that rate hikes -- rather than reduced asset purchases -- are back on the menu

Ben Bernanke said today that the Federal Reserve has two policy tools at its disposal: the level of the short-term interest rate and the quantity of assets added to its balance sheet. Short rates have been stuck around 0 percent for years and, according to the Fed, look to remain there until sometime in 2015. So most attention was on the impact of asset purchases and what will happen when the Fed stops buying bonds.

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