Abstract
As the US Federal Reserve (Fed) starts to taper its massive quantitative easing (QE), it faces difficult tasks and serious risks in unwinding QE and in managing the move from near-zero policy rates. Despite its notable pandemic success to date, the Fed’s “patient” approach is encountering increasing criticism as starting too late and being inadequate in its pace and scale. This paper examines the Fed’s policy transition challenges, and explores several crucial impacts for Canadian fixed income markets.