Investors and money managers are intensely focused on when the Federal Reserve will start shrinking its massive stimulus effort.

But the highly anticipated tapering is already priced into markets, John C. "Jack" Bogle, senior chairman and founder of The Vanguard Group told CNBC.

Economists generally think the Fed will start reducing its $85 billion monthly bond purchases early next year.

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"If the inflation rate is too low to suit the Fed and the unemployment rate is too high, that tapering will begin. It's gotta begin sometime," Bogle explained.

When the Fed does start tapering, bond yields may spike and stocks may plummet, as investors fear the Fed's easy money policy. Markets were roiled markets earlier this year when central bank officials speculated about an imminent tapering.

Although yields may rise somewhat, the yield curve, the difference between short-term and long-term rates, indicates that the market has largely priced in tapering, according to CNBC.

After Fed Chairman Ben Bernanke first spoke about taper plans last May, the yield curve quickly became much steeper. Yet the spread between short-term and long-term yields remained stable in early December when improving economic data meant tapering was more likely, stated Citigroup analysts in a report to clients, CNBC noted. That indicates that markets have already largely reacted to tapering and that it won't have the huge impact that many anticipate, the analysts predict.

"Tapering may be a concern, but there are reasons why it may not be as much of one as many expect. In fact, we have seen signs in recent trading that U.S. credit may be fairly immune to tapering headlines," the Citigroup credit analysts wrote.

"QE [quantitative easing] is obviously a huge source of direct demand in the rates space, and a large indirect source elsewhere," they said. "All else equal when tapering takes place demand in the rates markets will fall sharply, and of course a spillover effect will be felt among risk assets. But all else is not equal."

Reducing the bond purchases might not roil the markets because the Fed has finally convinced investors that tapering does not equal tightening, according to The Washington Post. Even after winding down the stimulus, the Fed can still maintain low short-term rates.

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