We have all been covering the potential Fed tapering because that has been the biggest ongoing story driving the market since Bernanke introduced the idea back in June. Most of us on this site agree that the U.S. economy is has not improved to a point where the Fed should taper, however most Fed insiders still believe that the taper will happen only to the extent of a $10 billion reduction. I found the mentality of this comment to be very interesting “Jerry Webman, chief economist at OppenheimerFunds Inc. in New York, said he expects the Fed will taper by $10 billion because that would avoid sending “a more pessimistic view of the economy” to investors, even though “it’s hard to argue the economy is accelerating.” Barring “fantastic data,” it would be “very risky” to cut purchases by more than that, he said. “The market would be pretty disturbed by the Fed doing more than a token taper in September.”

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