Morgan Stanley's Chief Economist Summarizes The Taper In Just 4 Words

YouTubeJohn Travolta in Pulp Fiction, staring down at some mysterious object in Pulp Fiction.Morgan Stanley chief economist Vincent Reinhart, writing in his weekly US Macro Dashboard note, has what is probably the most succinct and accurate take there is on the subject of "the taper" (the Fed's inclination to slow its pace of bond purchases).

Here it is. It's just 4 words.

Tapering is old news.

Maybe the Fed will start slowing its pace of bond purchases in December. More likely it will be September. It doesn't make much of a difference.

But really the story now, with respect to the Fed, is when the first interest rate hike will be, and Bernanke did a good job on Wednesday indicating that it will be a long way off, and that there's no appetite to see rates rise very fast on the long end, let alone the short end of the yield curve.

The Taper might still get talked about, but at best it's the MacGuffin, the thing in the movie that drives the plot along, but which isn't really central (think: The briefcase with the glowing thing in it in Pulp Fiction). It's old news now. Time to move on.