09/23/2021

Federal Reserve Signals Bond-buying Taper Coming 'Soon'

Next year, there will be a rate hike

On Wednesday, the Federal Reserve said it will likely begin reducing its monthly bond purchases as soon as November and signaled interest rate increases may follow more quickly than expected as the U.S. central bank's turn from pandemic crisis policies gains momentum.

The slight hawkish tilt was signaled in a new policy statement and economic projections that showed nine of 18 Fed officials ready to raise interest rates next year in response to inflation that the central bank now expects to run at 4.2 percent this year, more than double its 2 percent target rate.

A drawdown of the central bank's $120 billion in monthly bond purchases could begin after the Nov. 2-3 policy meeting as long as U.S. job growth through September is "reasonably strong, Fed Chair Jerome Powell said in a news conference following the central bank's latest two-day session. The U.S. nonfarm payrolls report for September will be released in early October, the last such report before Fed policymakers gather again in November.

Please select this link to read the complete article from Reuters.