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Net Net: Promoting innovation and managing change

The market's next Fed fear: The exit strategy

Federal Reserve Board Chair Janet Yellen.
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In another month, investors won't have Federal Reserve money stimulus to juice up the market. In return, they do have one thing they might rather not see: An exit door.

Even if the U.S. central bank didn't exactly start flashing the lights to indicate that the easy-money party is over, it at the very least indicated that it won't go on forever. The monthly bond-buying programquantitative easing—almost certainly will end in October, and the Fed last week gave a rough outline for how its zero interest rate policy will unwind in the years ahead.

Prior to the Fed Open Market Committee meeting, market participants had trained their gazes at two phrases within the statement: "Considerable time," in reference to how long it would take from the end of QE to the first rate increases, and "significant underutilization of labor resources" regarding the job situation.

Both phrases stayed in the statement, easing consternation on Wall Street, which worried that the removal of either would be a hawkish policy stance.