The bond market is ready for it. Equity players are nervous about it. And the number of economy watchers who expect it as early as this week is growing by the day, as they sift through the latest data and weigh the importance of a bipartisan budget deal reached last week in Washington.
It is the Federal Reserve’s long-awaited move to begin scaling back its enormous bond purchases, totalling $85-billion (U.S.) a month, and slowly embark on the long road back to more normal monetary policy. As usual, the signals are mixed.