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Wed May 19, 2021, 07:21 PM

The Fed hinted it could reconsider easy policies if economy continues rapid improvement

Source: CNBC

Federal Reserve officials at their April meeting said a strong pickup in economic activity would warrant discussions about tightening monetary policy, according to minutes from the session released Wednesday.

“A number of participants suggested that if the economy continued to make rapid progress toward the Committee’s goals, it might be appropriate at some point in upcoming meetings to begin discussing a plan for adjusting the pace of asset purchases,” the meeting summary said.

Markets have been watching closely for clues about when the central bank might start tapering its bond purchases, which currently are at least $120 billion a month. The Fed balance sheet is just shy of $7.9 trillion, nearly double its level before the Covid-19 pandemic.

Fed officials have been steadfast that they won’t change policy until their economic goals, particularly regarding employment and inflation, have been hit. The discussion revealed in the minutes is the first time that central bankers have indicated that a reduction in purchases could happen ahead, though there was no timetable.

Read more: https://www.cnbc.com/2021/05/19/fed-officials-said-rapid-progress-in-economy-could-lead-to-lowerng-asset-purchases.html

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Reply The Fed hinted it could reconsider easy policies if economy continues rapid improvement (Original post)
SouthBayDem May 2021 OP
brush May 2021 #1

Response to SouthBayDem (Original post)

Thu May 20, 2021, 06:38 PM

1. How will it affect interest rates?

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