Fed’s Outlook for Tapering and Rate Hikes

Federal Reserve officials could start cutting extraordinary aid to the economy as early as mid-November, according to minutes from the September meeting of the central bank released on Wednesday.

The summary of the meeting shows that members believe that the Fed is close to achieving its economic goals and may soon begin to normalize policy by reducing the pace of its monthly asset purchases.

Minutes indicate that the central bank is likely to start with a reduction of $ 10 billion a month in government securities and $ 5 billion a month in mortgage-backed securities. The Fed currently buys at least $ 80 billion in bonds and $ 40 billion in MBS.

The target date for discontinuing purchases, if there are no interruptions, will be mid-2022.

“Participants noted that if a decision is made at the next meeting to start reducing purchases, the narrowing process could begin in mid-November or mid-December,” the summary said.

The next Fed meeting is scheduled for November 2-3. The start of the narrowing process in November is on the aggressive side of market expectations.

In a “dot plot” of individual members’ interest rate expectations, the commission said it could start raising interest rates as early as 2022. Markets are currently priced for the first rate hike next September. > After the publication of the protocol, traders increased the probability of a September increase to 65%

However, some members of the meeting expressed concern that the current inflationary pressures could last longer than they expected. Traders set a 46% chance of two interest rate hikes in 2022


 Junior Trader Nikolay Petrov


Leave a Reply

Login to comment

* Rough, sarcastic and ironic language is not allowed. For such Admins Delete without notice.

Varchev Absolute Trader

борсова платформа

  • Търгувай над 3000 финансови инструмента: Crypto, Форекс, Акции, Индекси, Суровини, ETF-и
  • Използвай платформа с директно изпращане ордерите на борсите
  • Best Trading Platform - "Online Personal Wealth Awards" EU награждава Varchev Absolute Trader
  • Cloud base платформа - твоят трейдинг сетъп на всяко устройство
  • Traders Talk - чуй какво движи пазарите в реално време
  • Market Sentiment - търгувай с настроенията на инвестиционите банки
  • Top movers - най-горещите трейдове във всеки един момент
  • Stocks scanner - филтрирай най-подходящите за твоя трейдинг стил пазарни инструменти
  • Heat map - Търгувай в посоката на големите играчи

Read more:
If you think, we can improve that section,
please comment. Your oppinion is imortant for us.
WARNING: Any news, opinions, research, data or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. Varchev Finance Ltd. expressly disclaims any liability for any lost principal or profits which may arise directly or indirectly from the use of or reliance on such information. Varchev Finance Ltd. may provide information, quotes, references and links to or from other sites and blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the sites, blogs or other sources of information.
Varchev Finance