Reading the Spastic Tea Leaves [UPDATED]

Report from Fed minutes: Fed may or may not taper off securities purchases sooner than expected or perhaps on schedule.

I hope that clears things up for you.

UPDATE: Then there’s this:

But Bernanke subtly suggested that that’s not the case, by saying “the unemployment rate probably understates the weakness of the labor market,” meaning when unemployment hits 6.5 percent, which the Fed expects it to do around the beginning of 2015, the bank might well decide that economic conditions are bad enough to keep its funds rate at the most stimulative level, zero (this wasn’t the first time Bernanke has said he thinks the labor market is weaker than the unemployment rate makes it look). To similar effect, he admitted that the Fed’s projections are indeed rosier than private-sector competitors’, saying “I think we’re somewhat optimistic,” again implying that the tapering of the Fed’s QE3 program and the raising of interest rates may not be happening quite as soon as he outlined in June, a sketch which sent markets tumbling. (One might note that, while the logic here is fairly clear, these kinds of messages are a little odd coming from a man who had just said transparency is the most important practice of a central bank.)

Further, there’s been plenty of concern over the rise in interest rates in the past few months, and Bernanke explained that the Fed would also be willing to address this issue if it begins to harm the economy.

Translation: ZIRP now, ZIRP tomorrow, ZIRP forever.