Federal Reserve Chair Jerome Powell points to progress and suggests that the central bank is about to wind down its emergency economic stimulus
Balancing the threat of Covid with the ongoing economic recovery, Powell suggested the Fed, which has been buying $120 billion worth of Treasury and mortgage-backed securities every month since the height of the pandemic to support the economy, will start pumping the brakes on those asset purchases before the end of the year.Interest rates are still near zero as well, though they won't move until the monthly asset purchases are addressed.
But that still doesn't mean the money taps will be turned off right away."For now, I believe that policy is well positioned," Powell said. He also stressed that a reduction to the monthly shopping spree wouldn't be a direct signal to raise interest rates.The minutes from the Fed's July meeting showed most central bank officials believed that the monthly asset purchases could be rolled back later this year if the economy keeps going at its current pace.
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