Key points
- Precedes end of QE program.
- 2013 "Taper Tantrum" caused bond market volatility.
- Signals shift toward tighter policy.
Example
In November 2021 the Fed began cutting its $120 billion of monthly bond purchases by $15 billion a month, then doubled that pace in December, ending purchases in March 2022.
In history
In May 2013, Bernanke's taper hint pushed 10-year Treasury yields from ~1.6% to ~3% in four months, sparking the Taper Tantrum.
Related terms