"Personally, I think it is too soon to taper, because the economic data have been disappointing and inflation is below target," says Mr Gagnon, who is now at the Peterson Institute for International Economics, a think tank in Washington DC.
Europe's main stock markets ended the day lower, mirroring concerns in other markets as expectations increased that the Federal Reserve would soon start tapering its stimulative bond purchases.
Indications from the Federal Reserve in Washington that it might soon begin tapering down its quantitative easing policy has also unsettled investors, setting off a rout in bonds that has erased tens of billions of dollars of value.
In a widely expected move, the central bank said its board voted unanimously to stand pat after a two-day policy meeting, as investors keep a close eye on the Federal Reserve of the United States amid growing speculation that it will soon start tapering its large stimulus program.
A strong report would mean the Fed might taper soon.
Five months later they said they'd start the taper soon, then they have reversed themselves again.
Hints by the Fed that it would soon ease, or "taper", QE led to a global stampede out of bonds in 2013.
Already, the market has been rattled by speculation that after years of big bond-buying, the Fed may soon begin to taper its appetite.
Recently, Ben S. Bernanke, the Fed chairman, hinted that the central bank might soon begin to taper its purchases of Treasury bonds as part of its efforts to stimulate the economy.
The yield on the 10-year Treasury bond is now 2.66 percent, compared with 2.19 percent before remarks by Mr. Bernanke on June 19 raised expectations that the Fed would soon begin to taper off its stimulus program of buying government securities.
