1) There is much speculation around when the Federal Reserve might begin to start raising rates. A modest taper of roughly $10 billion at each Fed meeting (there are 8 in 2014) would end QE3 in roughly October 2014.
Guessing when the Fed might raise short-term rates is tougher, since they said they would not raise rates until "well past the time that the unemployment rate declines below 6.5 percent." No one seems to know what "well past" means, but assume they are talking about 6 percent as a threshold.
Most are assuming we will not see anything near this until well into 2015, but that may not be the case at all. If the government fails to pass an extension of unemployment benefits soon, it would take many people off the unemployment rolls and decrease the labor force participation rate.
That by itself could knock several tenths of a percent off the unemployment levels. How much? Michael Feroli, JP Morgan's chief U.S. economist, estimates it could shave as much as 0.5 percentage points off the jobless rate. Joe LaVorgna at Deutsche Bank estimates the decline will be closer to 0.2-0.3 percentage points, so instead of a current unemployment rate of 7.0 percent, we are talking about a decline to anywhere from 6.5 to 6.8 percent.
My point: if the economy keeps improving, we could be looking at something close to a jobless rate of 6.0 percent in 2014. If that is the case, it may greatly complicate the Fed's plan, as they may have to start hiking interest rates sooner than many expect. Rate hikes could be a much stronger headwind in 2014 than anyone thinks.
—By CNBC's Bob Pisani