MLIV commented that if you look at the indicators of inflation expectations in the market, you may understand the reason why the Fed is talking about reducing the size. The 5y5y forward indicator of inflation expectations in five years' time is the long-term inflation expectation indicator I have chosen. At present, it is sprinting to a seven-year high.
Earlier today, WTI crude hit $80 a barrel and we keep hearing reports of supply chain problems that will only fuel inflation. In short, inflation expectations remain problematic. While there is nothing the Fed can do about the supply chain or oil supply, cutting back will give the Fed more options if inflation expectations are no longer stable.