FOMC announces small taper

Looks like the perpetually confused FOMC is deciding to scale back the monthly purchases a bit: $5 billion in MBS and $5 billion in Treasuries.

http://www.washingtonpost.com/business/economy/fed-to-scale-back-stimulus-by-10-billion/2013/12/18/54dc2ee4-6747-11e3-8b5b-a77187b716a3_story.html?wpisrc=al_comboNE_b

Any predictions? I doubt that such a small change in the quantity of purchases will have much of an effect anyway. What I am sure about is that this decision will spur a whole flurry of misinformed comments on QE. For starters, the above article repeatedly referred to it as "stimulus".

Nate Silver — Can Republicans Win the Senate in 2014?

The Big Picture 

Summing up the possibilities across all 35 Senate races yields a net gain of four to five seats for Republicans, just short of the six they would need to win back the majority.

However, the margin of error on the calculation is very high at this early stage. Keep in mind that in each of the last four cycles, one party (Democrats in 2006, 2008 and 2012; Republicans in 2010) won the vast majority of the competitive races. If Republicans swept all the “lean” and “tossup” races, they would gain a net of eight seats from Democrats, giving them a 53-to-47 majority in the 114th Congress. If Democrats swept instead, they would lose just one seat and would hold a 54-to-46 majority. Considering the uncertainty in the landscape, estimates from betting markets that Democrats have about a 63 percent chance of holding their majorityappear to be roughly reasonable.

One last factor to consider is that as difficult as the Democratic Senate map looks in 2014, Republicans could face an equally challenging one in 2016. In that year, seven Republican-held seats will be up in states won by Mr. Obama in 2012, while no Democrats will face re-election in states won by Mr. Romney.
Thus, as ridiculous as it might seem to look so far ahead, the most important reverberations from the 2014 Senate races might not be felt until 2016 and beyond. Republicans will need to make considerable gains next year to open up the possibility of a Republican-controlled Congress after 2016. If Democrats hold their ground, conversely, it would provide for the outside possibility of their holding a filibuster-proof majority after 2016.

The New York Times | Five Thirty Eight
Can Republicans Win the Senate in 2014?
Nate Silver