Fed Chairman Jerome Powell will hold back from signaling that the tapering of asset purchases will be announced in September, analysts say.
Federal Reserve Chairman Jerome Powell will be able to equivocate about when the central bank will start slowing down the pace of its bond-buying, essentially signaling a delay until November, economists said Monday.
Powell’s messaging is helped by the fact that the Jackson Hole, Wyo., retreat was switched to a virtual single-day meeting on Friday instead of the traditional two-day event marked by Western-attire dinners, fishing and hiking, after a spike of recent COVID-19 cases in western Wyoming. “I view them as quite likely to taper between now and the end of the year, irrespective of delta,” said Adam Posen, president of the Peterson Institute for International Economics.Dallas Fed President Rob Kaplan, a strong advocate of slowing down asset purchases, said last week that he might rethink his push for a September announcement given the spread of the delta variant.The Fed is buying $120 billion of Treasurys and mortgage-backed securities each month. The taper is not a tightening.
A new survey from the National Association for Business Economics found that, for the first time since the pandemic began, a majority of business economists believe the Fed is providing too much stimulus, a marked shift from last spring that reflects growing worries about high U.S. inflation.
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