Once upon a time the only predective power of the Fed was that if they raised rates then the stock market went down, and when they lower rates the stock market went up,
Now something funny happened since 2007, the only buyer of US Treasury Bonds is the US FED, Uncle Sam has almost 60% of the USA public getting some kind of ‘check’ every month, … spending way more than revenue, so they borrow, but then nobody wants to loan them, so they borrow from the Fed.
How this will end is that Rates will go up, just like Volcker did back in late 1970’s, back then we all thought the world was coming to an end the dollar would collapse, and guess what? As soon as the T-Bill was paying 22% ( or even 18% ) every ‘investor’ on earth wanted “US-T’s”
The last few years has been pretty good for the banks and stock market, but even under the 20% interest people were still buying homes, if they can ‘engineer’ inflation, and people see homes doubling in price every year, then nobody cares about paying 20%/year on interest,
Lastly, I get really tired of this word ‘taper’ who gives a hell what ‘they’ call anything, the FED long ago quit its charter of inflation and un-employment now its only job is buying government debt. Will they quit? Yes, ,once the interest rates go up they debt will sell its self. The inflation will cover for the government as it always has, going back to Ben Franklin.
Nobody worry’s about buying a house or car if they double in price every year.
In the past 5+ years we have been in deflation, but the inflation is about ready to begin. Just like GOLD it goes down because people had to sell to pay the bill’s. Note also that in the 1970’s high interest rate that GOLD didn’t do well. My guess is that its long been over-sold.
The real question is ‘hyper-inflation’, probably not going to happen in USA, the other question is US-DOLLAR-Reservce status, given that the USA is still the worlds policeman I think its a safe bet that all heroin, cocaine, black-oil, will continue to be traded in petro-dollars, and thus the USA will hobble along.
Back in the USA, the USA will return to a PENAL COLONY, its #1 service to the world will be to warehouse criminals, that which it did long before 1776.