In one of the most highly anticipated releases of the year, the Federal Open Market Committee (FOMC) meeting minutes from July 30-31 were released today (Wednesday).
They will be picked apart for days - but here's what you need to know.
First, investors were left with no real clarity on when and by how much the Fed will start winding down its monetary stimulus measures - although a taper starting in 2013 looks likely.
While some Federal Reserve officials were "broadly comfortable" with Chairman Ben Bernanke's aim to start tapping the brakes on its asset purchase program sometime this year, a few members chimed in that tapering might be in order sooner rather than later.
"Almost all committee members agreed that a change in the purchase program was not yet appropriate" and that patience is called for, the minutes showed. Yet, a handful added "it might soon be time to slow somewhat the pace of purchases as outlined in the plan."
Worried about the consequences of prolonging quantitative easing, the Fed said at the end of the FOMC meeting in July that while economic growth should pick up from its recent snail's pace, persistently low inflation could dampen the recovery.
The central bank also reiterated its pledge to hold the target interest rate near zero as long as the jobless rate remains above 6.5% and the outlook for inflation over one to two years doesn't exceed 2.5%.
But the real story is what happened to the stock market today...
FOMC Meeting: The Stock Market Today a Preview of What's to Come
Immediately following the release, investors hit the panic button and sent the Dow down some 122 points before relenting and allowing stocks to stage a sharp turnaround.
Then, about an hour before close, the Dow again plunged to close down 105 points, or 0.7%.
Kent Engelke, chief economic strategist at Capital Securities Management, told The Wall Street Journal that while markets have mostly discounted the foreseeable, which is a tapering as early as September, jitters prevail.
EDITOR'S NOTE: Bernanke's printing presses are still running... for now. But do you have a plan in place for when they stop? Here's what to do to protect your wealth right away.
"People are still being whipped around by fears of Fed tapering," Engelke said. "We just have to accept that we're going to have a change [in policy], but any change is unsettling."
Ever since the first mumblings of tapering in May, equity markets have been on edge.
You see, three generous rounds of quantitative easing have helped drive the S&P 500 Index up more than 150% from its 2009 bear-market bottom. Investors fear the damage that taking away the fiscal punch bowl might do to equities.
Heading into the minutes release, the Dow logged a five-session losing streak, its worst slide since December 2012. Now that stretch has been extended to six. The benchmark hasn't suffered a six-day drop since July 2012.
Down 4.8% from its Aug. 2 high, the blue-chip index sank through the key 15,000 threshold Wednesday for the first time since July 3.
Meanwhile, the yield on the 10-year Treasury spiked to 2.85%, a two-year high. Wall Street watchers are keeping an eye on the key 3% level, a yield not seen since July 25, 2011.
Bernanke has repeatedly said that tapering is data dependent, and economic data lately has been mixed at best. Jobs gains in July slowed by 162,000 from an average monthly pace of nearly 200,000 during the first half of 2013.
Additionally, retail sales are starting to show signs of consumer restraint, and manufacturing output has been muted.
So, with only a few months before Bernanke likely pulls the plug for good on QE, it's time to prepare for what could be a stock market death spiral. Money Morning's top experts put together a "safety plan" you can use to protect your wealth right away - you can get it here.
Fed minutes: Policymakers favor tapering this year
The Wall Street Journal:
Stocks Extend Losses After Fed Minutes
Wall Street hits session low after Fed minutes