The Federal Open Market Committee is meeting this week, and many expect the Fed to taper its quantiative easing program by another $10 billion, bringing the total amount of QE down to $65 billion per month. And while tapering seemed to be atop nearly everyone's list of concerns in 2013, traders expect the market reaction to the announcement of a further Fed taper to be muted.
"I do believe the Fed intends to announce a continuation of the taper next week, and I don't think it will be particularly shocking to the markets," Jim Iuorio of TJM Institutional Services said Friday, reflecting the views of many traders.
The two-day meeting starts Tuesday. A statement will be released Wednesday, followed by a news conference. This will be the final meeting chaired by Ben Bernanke, with Janet Yellen taking over at the beginning of February.
The Fed announced its first reduction of asset purchases in its December meeting, following months of speculation about when it would start to wind down its $85 billion program. The Fed also noted in December that it would watch employment data closely as it decides upon the future of its asset purchases. Although the December employment report showed that the economy created only 74,000 jobs, economists generally expect the Fed to cut down purchases by another $10 billion anyway.
(Read more: The Fed is trapped; buy gold now, Peter Schiff says)