وقال Jerome Powell The Fed chair said the Fed could wrap up reducing its bond purchases by the middle of next year.
Powell’s comments came at a news conference following the publication of the latest monetary policy statement from the Federal Reserve, which said that “a moderation in the pace of asset purchases may be justified soon,” but did not include any indication of the time period that might take that process.
The Federal Reserve buys $120 billion a month in Treasuries and mortgage-backed securities to support the recovery of the world’s largest economy from the Corona virus pandemic.
The US Fed indicates that a reduction in bond purchases will come “soon”
The Fed cleared the way to reduce its monthly bond purchases “soon” and indicated that interest rate increases could follow at a rapid pace.
Faster than expected, with the 18 members of the US central bank’s monetary policy-making committee speculating that there will be a need to raise borrowing costs in 2022.
These measures, which are included in the Fed’s latest monetary policy statement and separate economic forecasts, represent a tightening tendency from a central bank that expects inflation this year to run at 4.2 percent, or more than twice its target level, and is preparing itself to move against it.
The move may proceed slowly, with interest rates expected to rise to 1 percent in 2023, faster than the pace projected by the Fed in June, and then to 1.8 percent in 2024, which will still be considered an accommodative stance for monetary policy.
Despite acknowledging that the new jump in Corona infections slowed the recovery of some parts of the economy, the Open Market Committee, the monetary policy maker of the Federal Reserve, said in a unanimous statement that the indicators as a whole “increased strength.”
It added that if progress “continues in general as expected, the Committee assesses that a moderation in the pace of asset purchases may be warranted shortly.”