Janet Yellen surprised many people during her first remarks as the Fed Chief last week. What was no surprise was the fact that the Fed will cut back on tapering by another $10 billion. Based on this rate of reduction, QE should end around October or November of 2014. What came as a shock was her announcement that rates could begin rising in as early as 6 months with the Fed funds rate projected to reach 1% by 2015. This was much sooner than many people had expected and the market volatility spiked as a result.
Take a look at the infographic below and tell me what side you belong to. Do you believe that the Fed should continue at the current rate of QE reduction and slowly raise rates over the next year or is the economy too fragile at this point?