The slow and steady Fed

A rate increase in December looks increasingly likely

The Federal Reserve’s Open Market Committee said Wednesday that the not-so-rapid unwinding of its $4.5 trillion bond portfolio will finally begin in October, and markets are taking it in stride. The committee also signaled that another interest rate increase is probably coming in December, and that isn’t spooking anyone either.

There’s no reason they should since the Fed is moving at such a gradual pace that no one is being taken by surprise. “Our balance sheet will decline gradually and predictably,” Fed Chair Janet Yellen said at her news conference following the Fed meeting. We wish the pace of the