Fed to taper bond buying in Q4 2021 – Bloomberg survey

Dhwani Mehta FXStreet

Ahead of this week’s FOMC decision, the latest Bloomberg survey of 49 economists shows that the US Federal Reserve (Fed) could begin tapering its $120 billion monthly bond-buying in the fourth quarter of this year, as the US economy stages an impressive post-pandemic recovery.

Key findings

“About 45% of the economists expect the Federal Open Market Committee to announce tapering in the fourth quarter with 14% seeing that happening in the preceding three months. The survey of 49 economists was conducted April 16-21. The result is a hawkish shift from March when slightly more viewed tapering as a 2022 event.”

“Economists say they will scrutinize the statement language and press conference for hints of a potential tapering. Powell has said he’ll alert markets well in advance of that change when the committee views its goals in sight, and that a policy change will hinge on actual incoming economic reports, not just bullish forecasts.”

“More than two-thirds of the economists surveyed expect the FOMC will give an early-warning signal of tapering this year, with the largest number -- 45% -- looking for a nod during the July-September quarter.”

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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