The Fed’s policy outlook (including their tapering schedule) depends on an expectation that the latest high levels of inflation will moderate by the end of the year. This is one of the key factors determining when they are likely to raise rates. The general idea is that if inflation gets under control in the “near term”, then the Fed will taper before raising rates. However, if inflation stays way above their accepted range, then not only could they bring the hike forward, but it could actually occur before the taper. Last week we had some news that could be an indication that inflation will continue to move higher. ... (full story)