Since the Federal Reserve last met, the U.S. job market has boomed; once-concerning COVID-19 vaccination rates have rapidly accelerated; and home prices, auto sales and manufacturing have all picked up.

Similar indications of a faster-than-anticipated post-pandemic economic rebound compelled the Bank of Canada last week to cut its weekly bond purchases from $4 billion Canadian to $3 billion Canadian and move up its expected inflation target from sometime in 2023 to some time in the second half of 2022.

But a similar, hawkish move to match its northern central bank counterpart would be a shocking surprise out of the Fed's two-day Federal Open Market Committee meeting, which began April 27. Committee members are unlikely to even discuss tapering the Fed's monthly purchases of $80 billion worth of Treasury securities and $40 billion worth of mortgage-backed securities.

"I don't expect anything from the Fed," said Michael O'Rourke, chief market strategist at JonesTrading, in an interview.

As detailed in its minutes from the March 16-17 meeting, the FOMC is now locked in on "outcome-based guidance" which dictates that monthly bond purchases will continue until "substantial further progress" is made toward the Fed's maximum-employment and price-stability goals. Instead of altering policy in anticipation of a jump in inflation, the Fed now wants to see inflation run hot at or above 2% for some time.

Adherence to outcome-based guidance is "now part and parcel of the US central bank's new policy of not reacting to perceptions of a direction of travel, but waiting until both goals of higher inflation and full employment has been achieved," wrote Michael Hewson, chief market analyst at CMC Markets, in an April 26 note.

As market participants eagerly wait to see if the Fed will tap the brakes on its dovish monetary policy, Hewson, O'Rourke and many others expect no indication of change from the central bank at this week's meeting.

And the Bank of Canada's decision to cut its bond purchases will have no impact on the Fed's quantitative easing path going forward.

"Not only are the QE programs of different scale and labor market progress at different points, but the Fed's reaction function — starting tapering after substantial further progress is already made — is more dovish than the BoC's reaction function — end tapering when the recovery is well underway," wrote Matthew Hornbach, global head of macro strategy in an April 23 note.

This week's Fed meeting "promises to be rather uneventful," said Aneta Markowska, chief financial economist at Jefferies, in an interview.

The committee will likely acknowledge that the U.S. economy has "inflected," drawing on Fed Chairman Jerome Powell's comments to CBS's "60 Minutes" earlier this month.

"I don't really see scope for a more significant tone change," Markowska said. "It's definitely too early for any strong taper signals. I think they start 'talking about talking about' tapering in June."

The bond and equity markets remain in the dark over when the Fed $120 billion in monthly bond purchases may be curbed.

In an interview, James Knightley, chief international economist with ING, said he expects the Fed will make a formal taper announcement in December, and he said a "volatile period" in asset markets is likely to follow.

"Transitioning from an environment where the Fed has the accelerator peddle pressed to the floor to one whereby they removing the foot from the accelerator and the perception is the next step will be to then tap the brake peddle is going to be one that carries the risk of higher bond yields," Knightley said. "However, the greater risk for a bond market sell-off would be if the perception increasingly becomes one that the Fed is ignoring the threat of inflation and markets start to lose confidence."

In an April 22 note, David Mericle, chief U.S. economist at Goldman Sachs, said he expects the FOMC to begin "hinting" at tapering in the second half of 2021 with actual tapering beginning in early 2022.

The Fed would taper about $15 billion in bond purchases per Fed meeting, leaving about one year to complete the tapering entirely, he said.

"After that, we think the FOMC will want to pause to take stock of the impact of tapering for at least one and ideally two quarters, putting rate hikes on the table around mid-2023," Mericle wrote.

Futures markets have begun to price in a potential rate hike as soon as next year despite signals from Fed officials that one is not coming until at least 2024.