If you follow any finance nerds on Twitter or watch CNBC, it’s going to be hard to avoid hearing the word “taper” today. But what the heck is it?
“The taper” is the label the financial press and the markets have slapped the Federal Reserve’s decision to start slowing down their massive purchases of long-term government debt and investments backed by mortgages, whenever it finally comes down. The reason they call it that is the Fed’s purchases are likely to taper off gradually, rather than be cut off suddenly, which would definitely harm the economy at this point.
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