Each month the Federal Reserve buys $85 Billion worth of bonds from commercial banks. This process is know as Quantitative Easing or QE for short and is designed to keep interest rate low for the public with the goal of having the public borrow money from the banks at low interest and spend it to stimulate growth in the economy. This bond buying program is designed to be gradually reduced once the economy is stable enough to grow on it’s own. This is knowing as “tapering”. Quantitative Easing is like training wheels for the economy, and the Fed is about to gradually take the training wheels off. The FOMC is expected to reduce the amount of bond purchases by $10-20 billion, but if it doesn’t it looks like bond yields would drop, equity markets would rally, and the dollar would also take a hit. For more information on Quantitative Easing, here are three myths about the bond buying program.