Fed's Bullard: Would want taper to be completed by first quarter of 2022

Eren Sengezer FXStreet

St. Louis Fed President James Bullard said on Wednesday that he would want asset tapering to be completed by the first quarter of 2022 to open the option for an interest rate increase if needed, as reported by Reuters.

Additional takeaways

"Firms currently have pricing power and executives seem confident they can pass rising input costs along to consumers."

"Labor markets are as tight as they ever get with more job openings than unemployed."

"Pandemic retirees are not coming back, the Fed does not need to strive to full return of pre-covid employment."

"Economy has clearly adapted to coronavirus, not seeing delta variant stopping the process."

"Seeing Q4-2022 as logical time for initial rate increase given expected ongoing employment gains and strong inflation."

"Expecting Fed to allow balance sheet to run off after taper is complete, allow market pricing to take over in long-term credit markets."

"Taper is mostly priced into markets at this point, details matter only a little at this point."

Market reaction

The US Dollar Index continues to push higher during the American session and was last seen rising 0.14% on the day at 93.26.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD: Breakdown below trading range support near 1.1770 comes into play

The EUR/USD pair opens with a bearish gap at the start of a new week as the US-Iran war-led global flight to safety boosts the US Dollar. Spot prices, however, lack follow-through selling and manage to hold above mid-1.1700s during the Asian session.

GBP/USD declines below 1.3450 on Middle East tensions, UK political uncertainty

The GBP/USD pair attracts some sellers to around 1.3420 during the early Asian session on Monday. The US Dollar edges higher against the Cable amid escalating tensions in the Middle East after recent US-Israeli strikes on Iran over the weekend.

Gold jumps over 2% toward $5,400 after US, Israel attack Iran

Gold is on fire at the start of the week, a widely expected move, as investors seek harbor in the traditional store of value, following the continued US and Israel attacks on Iran. The bright metal opened with a bullish gap of about $17 and rallied toward the $5,400 level as Asian traders hit their desks and reacted negatively to the weekend news of the Middle East conflict, rushing for cover in Gold.

Iran escalation: Quick thoughts on markets

Markets are likely to open the week with risk-off, with declines led by airlines, cyclicals and trade-exposed names, while energy, defense and “strategic” sectors may be relatively steadier.

Crisis in the Middle East: The market reaction

A primer on how markets will open on Monday, and why geopolitical risk may not be easily absorbed by financial markets this time around. Geopolitics and events between Iran, the US and the wider Middle East will dominate financial markets on Monday. The situation has continued to escalate as we move through Sunday.

Starknet unveils strkBTC, shielded Bitcoin transactions on Ethereum Layer 2

Starknet, the Ethereum Layer 2 network developed by StarkWare, today announced strkBTC, a wrapped Bitcoin asset that introduces optional shielding while preserving full DeFi composability.