Fed chief signals supports for the economy could begin to be pulled back this year
Source: Washington Post
Federal Reserve Chair Jerome H. Powell offered his clearest signal yet that the Fed could soon start scaling back its support for the markets if economic recovery remains strongly on track, despite ongoing uncertainty from the delta variant of the coronavirus. Powell is expected to describe an economy brought to its depths by the pandemic, which disproportionately hurt people of color and workers in service industries, according to remarks to be given virtually Friday morning.
But Powell’s overarching message is that the recovery is on the path to a strong labor market, overall wage gains and pandemic-era price increases that are expected to simmer down. In March 2020, coronavirus cases began to spread throughout the United States, shutting down the economy and causing the financial markets to tank while millions of workers were laid off or furloughed in the shutdown that followed. The Federal Reserve swooped in to prop up the markets with several programs.
Fed leaders have consistently said they need to see “substantial further progress” on inflation and job growth before the central bank starts to pare back its $120 billion a month in asset purchases, which have been helping support the markets. For months, economists and Wall Street have been eager for any signs about when or how the Fed will begin to “taper" its sprawling bond buying program, which helps stimulate the economy and makes borrowing easier by holding down long-term rates.
“My view is that the 'substantial further progress’ test has been met for inflation,” Powell said in the remarks. “There has also been clear progress toward maximum employment.” Powell added that at the Fed’s last policy meeting in July, he “was of the view, as were most participants, that if the economy evolved broadly as anticipated, it could be appropriate to start reducing the pace of asset purchases this year.”
Read more: https://www.washingtonpost.com/us-policy/2021/08/27/powell-federal-reserve-jackson-hole/
Full headline: Fed chief signals supports for the economy could begin to be pulled back this year, if recovery stays strongly on track
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is to rewrite the tax code to close those loopholes...
Of course good luck with that given the Senate makeup, but who knows? It can be done via reconciliation (if only... 
).
