Fed begins taper

Fed begins a $10 billion taper.

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The Federal Reserve’s Federal Open Market Committee (FOMC) kicked off its final two-day meeting of 2013 on Tuesday.

Stocks have continued their record run with the Dow and S&P hitting all-time highs since the Fed didn’t pull back on its monthly asset-purchasing program back in September as many had expected.

Tangible job growth has been at a focus of the central bank’s policymakers. In November, U.S. employers added a better-than-expected 203,000 jobs, with the unemployment rate dipping to 7 percent. The Fed has previously said it is looking for a 6.5-percent unemployment and 2.5 percent inflation rate before implementing an exit strategy from its $85-billion-a-month bond-buying program, also known as quantitative easing.

After nearly eight years, Ben Bernanke is stepping down as Fed chairman early next year. His designated successor, Vice Chair Janet Yellen, faces Senate confirmation this week. Yellen is known to lean dovish in her stance—favoring easy policy like Bernanke—which would likely bode well with markets.

(Read moreFed-inflated stocks a ‘hall of mirrors’: Jim Grant)

This is the third round of QE since the financial crisis of 2008, and many investors believe that QE is the primary reason stocks have rallied since bottoming in March 2009. 

—By CNBC’s JeeYeon Park. Follow her on Twitter @JeeYeonParkCNBC.

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