What is tapering and why is it a concern? While the Federal Reserve is likely to keep rates at 0% through 2021, they may slow (taper) their purchase of assets (U.S. Treasury, Mortgage, and Corporate Bonds). What this means is the Federal Reserve will continue to add liquidity and support to markets, but at a slower rate. The last time the Federal Reserve announced a tapering program was in 2013, and the market dropped close to 10% in the span of three weeks.
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