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Will Dovish Fed tiptoe into tapering?

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The Federal Reserve, five years after the financial crisis began, is expected to take the historic but small step of slowing down its easing programs and gradually steer markets toward an era of more normal interest rates.

While it may seem a minor first step, the exit from unconventional policy will send a strong message that the Fed believes the economy will be able to stand on its own. The Fed will assure markets it will keep its zero interest rate policy in tact well into the future, and that it will not move its Fed funds target rate until well into 2015.

"Markets were expecting QE for infinity and that was wrong.The Fed was hedging against tail risk, and now they're hedging against the tail risk of their own actions," said Diane Swonk, chief economist at Mesirow Financial.