So, despite the consensus of pundits I reported in this post, the Fed has begun tapeing off its third round of quantitative easing earlier than expected, known in economist parlance as QE3. Apparently, the Fed is taking it slow and wants to be cautious about its reduction of quantitative easing so as to not jeopardize the current recovery. The Fed’s stated unemployment rate target is 6.5%, and most pundits seem to feel that the Fed won’t start to raise interest rates until April of 2015. But the pundits were also wrong about when the Fed would start easing off the gas peddle that is quantitative easing, so take those predictions with a grain of salt.

On an addtional note, Janet Yellen has been sworn in and started her tenure as the first female chair of the Fed. Obviously, she’s not even a full week into the job yet, but it seems she will break with Ben Bernanke’s policy of putting the Fed’s cards on the table and going to great lengths to explain what they were doing and way. Instead, it seems she prefers the style of Alan Greenspan: speak rarely, do what you think is best, and don’t worry about the pundits. So where will the Fed be headed for the next year? Your guess is as good as mine, but watch this space.