The Fed’s exit strategy is a work in progress that will be determined by the economic data and the evolution of the Fed’s thinking on the costs of unwinding its ultra-loose monetary policies. But we currently expect the exit strategy will include five broad stages, including the tapering of the monthly asset purchases this September, the end of QE3 completely next June, a well-telegraphed first rate hike in March 2015 and the sale of some the Fed’s holdings of Treasuries starting in 2017.
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