“I am supportive of moving toward a tapering process sooner rather than later. When exactly that happens, the committee needs to decide. I would hope sometime this year we would be able to start the tapering process,” told Philadelphia Federal Reserve Bank President Patrick Harker in a Nikkei interview, per Reuters.
Fed signals Nov taper and 50% chance of 2022 rates lift-off
FED'S LAST EMERGENCY MEASURES REVIEW
Cleveland Federal Reserve Bank President Loretta Mester said on Friday that she would still like to begin tapering asset purchases some time this year despite the weak August jobs report, per Reuters.
Atlanta Fed President Raphael Bostic does not expect a call on tapering at this month's FOMC meeting but he believes the US central bank will be able to taper later this year, the Wall Street Journal (WSJ) reports on Thursday.
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September Fed decision review
Powell surprised by signaling taper announcement could come in November. Tapering may end by mid-2022, opening the door to earlier rate hikes. Powell's comment on employment goal "all but met" is a significant hawkish shift.
Tapering is coming – it "may soon be warranted," according to the statement that has just been released by the Federal Reserve. Moreover, nine members now see interest rates rising in 2022 – up from seven last time.
July Fed decision review
As widely expected, the FOMC did not make any major policy changes at today's meeting. The decisions to keep the target range for the fed funds rate unchanged as well as the pace of asset purchases was unanimously supported by all 11 voting members of the Committee. The FOMC acknowledged that "progress" has been made toward reaching the Committee's goals of maximum employment and price stability.
Has the Fed merely kicked the can down to its next meeting? While markets had expected the world's most powerful to refrain from any hint about reducing its $120 billion/month bond-buying scheme, this July meeting may have included a longer pause than expected. It is "a ways off."
June Fed decision review
As widely expected, the FOMC made no substantive policy changes at today's meeting. The Committee maintained its target range for the fed funds rate between 0.00% and 0.25%, and it kept its monthly pace of asset purchases unchanged. But the FOMC raised its inflation forecast considerably for 2021, and most members see the risks to inflation as skewed to the upside.
The hawks are awakening – that seems to be the message from the Federal Reserve's "dot plot," causing jitters in markets and supporting the dollar. The Fed has released new economic forecasts, and there are now more members foreseeing a rate hike in 2023.