Excerpt
PAUL SOLMAN (Newshour): A candle, also known as a taper, a candle shrinking, also known as tapering, and thus we introduce the decision once again facing the Federal Reserve and its much-anticipated Open Market Committee meeting this week.
To taper or not to taper, that is the burning question for bond investors, for stock investors, for the economy as a whole. Since the crash of '08, the Fed has created several trillion dollars of new money to buy Treasury and mortgage-backed bonds. Will that buying finally taper off?
We spoke with former Fed economist Catherine Mann.
CATHERINE MANN, Brandeis University International Business School: Taper means reduce the amount, the pace, so going from $45 billion to, say, $35 billion a month.
PAUL SOLMAN: Billions of dollars that, ever since the crash, the Fed's trading desk in New York has periodically injected into the economy by a process known as quantitative easing, creating great quantities of money to buy bonds, thus easing interest rates to boost the economy.
So what does Professor Mann think the Fed will do this week?
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