Esther George of the Kansas City Federal Reserve told Fox Business News that it is time to start the end of the Federal Reserve's bond buying program. While unemployment is high, she noted that actual employment is improving. She also thinks that the US will grow at about 2% in 2013. As she is the one major hawk that votes against the bond buying part of quantitative easing, she is trying to voice yet again that the time has come to start tapering the bond purchases.
One thing that Esther George did note was that the markets have finally figured out that bond buying efforts will not last forever. While she wants to see the tapering off of bond buying sooner rather than later, she said that the Fed should start ending its bond buying entirely by the middle of 2014. George feels that the banks and the economy can benefit from higher long-term bond yields.
As far as how the tapering and end should work, that is based upon triggers for the timing and the pace should be based upon the pace of the economy.
Today's news feels new because it is fresh and it is after Ben Bernanke clarified his stance on quantitative easing measures. The problem is that the long-term interest rates rose 100 basis points from the start of May to right after the start of July before petering out and settling at a slightly lower level.
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