New economic data strongly and consistently support the hypothesis of strong economic recovery, therefore driving the inflation expectation back up to 2.3% or higher. Given the decidedly mixed data so far, this is unlikely. But in this case the Fed may not do or say anything drastic.
Mixed economic signals continue, inflation expectation stays below or fluctuates around 2%. This is likely, and the Fed would have to tighten the leash and stop the taper talk quickly. Some encouraging words, meaning a pessimistic outlook in today's world, may be said.
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