Hilsenrath to Wall Street: You don’t know Fed

Jon Hilsenrath previews this week's Fed meeting

Investors may be right to anticipate that no bombshells will emerge from the Federal Reserve meeting this week—but as they look into next year, it will be very difficult to predict when the Fed will begin to taper its quantitative easing program, Jon Hilsenrath told "Futures Now."

"The fact of the matter is, we just don't know," when tapering will begin, said Hilsenrath, The Wall Street Journal's chief economics correspondent. "It depends on how the economy does."

The Federal Open Market Committee meeting will begin on Tuesday, and on Wednesday, the Fed will release its first statement since Sept. 18.

In its September statement, the Fed surprised many investors and Wall Street firms by announcing that it would maintain its $85 billion pace of monthly bond buying, rather than begin to taper that down as many anticipated.

Since then, several banks—including Goldman Sachs, Barclays and Deutsche Bank—have pushed back their expectations for when the Fed will start tapering back to March.

(Read more: March 2014 most likely date for tapering: Goldman)

Hilsenrath says there's a problem with forecasts such as these.

"You could say March taper if you know what kind of growth we're going to get over the next few months, and if you know what kind of employment gains we're going to get," he said. "In other words, if the economy grows pretty well, and if we get a pickup in job growth, they could start pulling back sooner."

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But because any tapering prediction is essentially secondary prediction off of an economic growth forecast, then calling for an exact date looks quite cavalier—especially given that economists have trouble predicting the Fed's next move even when they have all of the most important information in front of them. After the September employment report was released, 66 percent of the 47 economists surveyed by the Journal incorrectly predicted that the Fed would announce tapering in the September meeting.

Hilsenrath does note that an ever-growing balance sheet could soon become a more serious concern to the Fed.

"A lot of Fed officials thought they were going to start winding this thing down by now," he said. "But it looks like it's going to go well into 2014. And they've got to decide if they're prepared to let this thing go well over $4 trillion."

(Read more: US bonds remain near 2.5% on hopes of delayed Fed taper)

Yet while Hilsenrath agrees with broad consensus in saying that it's highly unlikely that the Fed committee is going to make any policy changes at this meeting, beyond that, the picture becomes much foggier.

"As the Fed keeps saying, it's all on the data right now," Hilsenrath said.

And without knowing what that data will look like, predicting the Fed's next move becomes a dangerous game indeed.

—By CNBC's Alex Rosenberg. Follow him on Twitter: @CNBCAlex.

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