Taper tantrum
2013-05-22 ~ 2013-06-19
Congressional responses in month 5 and a press conference in month 6 explained possible purchase reductions, prompting a strong market reaction.
An educational interval between two major communication events, not the end date of all market turmoil.
Conditions at the time
Expectations about the Federal Reserve’s purchase volume and exit path became important factors in long-term rate assessments.
How events unfolded
Congressional responses in month 5 and a press conference in month 6 explained possible purchase reductions, prompting a strong market reaction.
Stakeholders and impacts
The Federal Reserve, bond investors and international funding-market participants reassessed policy conditions and rate paths.
Information available at the time
The 5/22 remarks expressed a conditional possibility of tapering over the next few meetings.
Findings confirmed later
In a month 10 retrospective, Powell explained that the market reaction was large relative to the announcement and that the path depended on economic data.
Alternative interpretations and limitations
A tapering signal differs from an immediate rate hike or immediate cessation of purchases. Country-specific outflow amounts require separate verification.
Source-based context and interpretation
Powell's retrospective described taper communications shifting expected rate increases and tightening financial conditions. The month 9 FOMC then left purchases unchanged. In his assessment, some participants treated a possible meeting date as fixed even though policy remained data dependent. ASSETCASTING interpretation: Prices can reflect future policy before purchases actually fall. Confusing slower purchases with rate increases can intensify repricing. Powell's personal account is not proof of every participant's motivation or a unanimous FOMC interpretation.
Evidence coverage through 2013-10-11 · Sources checked 2026-10-14
Related events and periods1
- Financial-crisis response and unconventional monetary policy
An event or period whose recorded start falls within this editorial interval. This does not establish that it caused or represents the characteristics of the era, nor guarantee that the entire period falls within the interval.
Historical events do not guarantee future recurrence or investment performance.