Stimulus has become such an engrained aspect to the market’s performance over the past four years, that any potential changes to the central bank-sourced support can have more sway over market performance than traditional fundamentals. Since the Federal Reserve announced its intention to set a time frame throttling back on its own, massive $85 billion-per-month program last week; the market has been shaken to its core.

Given the market’s current performance as of late (and somewhat confirmed by surveys of economists’ expectations measured by Bloomberg and Reuters), the timing for the first Taper move is the September meeting – when the forecast updates and press conference are scheduled. The first move is also seen as a decrease in the monthly Treasury and Mortgage-Backed Securities (MBS) purchases from $85 billion to $65 billion per month. We can see the speculation and reasoning for this outlook in the graphic below.

With three policy officials on the newswires this past session (and four more due tomorrow), we had a significant opportunity to alter the market’s expectations. However, the balance of what was seen is clearly a means for sticking to the general time frame that Bernanke laid out last week – decisions being data dependent rather than date dependent don’t change this as their open assessment of ‘may moderate QE3 purchases later in 2013’ was made against forecast.

William Dudley (Voter)

• Repeats a QE Taper may be appropriate later in 2013 (hawkish)

• Fed may end its QE program by mid 2014 (hawkish)

• Says the unemployment rate may be approximately 7% by the end of QE (neutral)

• Economic data is more important than market changes for policy (neutral)

• QE may be prolonged if the economy falls short of Fed forecasts (dovish)

• After trimming QE, policy will remain accommodative (neutral)

• Increase in short-term rates is likely a long way off (neutral)

Jerome Powell (Voter)

• Sees Fed scaling back asset purchases later in 2013 (hawkish)

• Bernanke signaled a very small change in policy last week (hawkish)

• There are signs in the fixed-income markets of a “reach for yield” (neutral)

• Data is more important than specific dates, path “in no way” predetermined (neutral)

• Labor market has made “real progress” (neutral)

• Increase in short-term rates is likely a long way off (neutral)

Dennis Lockhart (Non-Voter)

• Bernanke timeline not “an enormous shift in policy” (hawkish)

• Suggests that markets may have misread Bernanke’s message (neutral)

• Current pace in labor markets mean 7% jobless rate in mid-2014 (neutral)

• Expected moderate growth continuing at a pace of 2 to 2.5% this year (neutral)

• Data-dependent rate rise may be appropriate “sometime in 2015” (neutral)