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John -- draft has a piece in the Wall Street Journal he of course being the person who really does have the year of Ben Bernanke a lot of other people within the Fed.
Suggesting that -- nobody's this much concerned about -- -- of the market -- their fear of fed pull back.
As the Fed itself and they are concerned that the market is overreacting.
To a lot of the rumors about the bond buying program and even rumors about possible rising interest rates John joins us now on the phone.
So John what is the Fed gonna do to try to come to market.
Well you know -- this then as a very complicated task they've been saying for several weeks now that they might pull back on -- 85 billion dollar a month bond buying program.
Its economy keeps improving.
But a lot of people are kind of taking that -- that next logical conclusion which is that they might start raising short term interest rates and fed officials say they're not trying to suggest that there.
-- hatcheries in short term interest rates so that's that's.
My -- -- -- that -- -- wrestling with that dilemma and help.
The markets are kind of reacting.
In ways they they weren't expecting.
Just I think what happens is they push back on that idea they've got a they've got a meeting.
Coming up next week and -- push back on this idea that a big scale back the bond buying program that means that there are -- push up interest rates.
So they are seeing if I if I hear you correctly they're seeing that the markets or investors participants are misinterpreting.
For actual rate hikes and they want to clear the air on that.
The markets responded in the last thirty minutes as soon as your article came out we started to see bond prices rise and the stock market jumped as well.
Kind of interest -- Yet you know -- and -- I think markets and I think we need to be very very specific about this sort.
But I'm looking at money markets you know like Fed Funds futures markets -- dollar market swap market.
These are markets where people are making bets on what the Fed's rate policy is going to be not tomorrow.
-- a year or two years from now and that market has he -- -- suggested that people were -- and rate hikes sooner than that said it's been signaling a force so I think that's where you see some he could do some push back -- -- defense got a pretty clearly stated policy here.
-- -- and a push up short term interest rates until they see unemployment break it down to six and a half percent or lower.
So you know if it's seven.
Over seven and a half percent now so you know we've.
-- tired to go before we get that.
So so OK nothing on nothing on rate hikes until.
Anyway or at least sometime in that -- the job market.
Shouldn't really can expect in the right if you -- I -- that there -- -- to bill on the other hand John what about bond but bond buying and the tapering of the bond buying any word about when that'll begin.
You know I I think they've been didn't talk about -- for the last few weeks I mean that the word on this is what Bernanke said.
To the joint economic committee few weeks ago he hit it -- could be in the next few meetings.
-- it depend on how the economy does so since he said that we got a pretty good.
Pretty good job support great jobs report probably not good enough for them to do it right away but certainly -- NAFTA for it to be in the conversation.
John hills wrath -- man who moves markets Wall Street Journal chief economics correspondent thanks -- gonna get to hear from him.
Reporter John great to hear from you thank you.
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