Washington (AP) —The Federal Reserve Board of Governors agreed at its last meeting that if the economy continues to improve, it will begin to reduce monthly bond purchases starting next month and end by mid-2022.
The debate was revealed in the minutes of the Fed’s September 21-22 meeting, which was announced Wednesday.
“Participants generally evaluated that a gradual tapering process ending around mid-next year is likely to be appropriate, provided that the economic recovery is largely on track,” the minutes said. Stated.
Last December, the Fed announced that it would buy $ 120 billion in bonds a month until the economy made “substantial progress” towards its goals for maximum employment and inflation. Bond purchases are aimed at encouraging more borrowing and spending by keeping long-term interest rates low. The Fed has also fixed short-term benchmark interest rates at near zero.
At a news conference following the September meeting, Federal Reserve Board Chair Jerome Powell said such progress was achieved with inflation and was “almost satisfied” with regard to employment.
“If the economy continues to make great progress as expected, I think we can easily move forward at the next meeting on November 2-3,” Powell said.
The government announced earlier Wednesday that inflation in September was up 5.4% from a year ago, comparable to the 13-year highs it reached in June and July. Ongoing price increases are putting pressure on the Fed to dial back its low interest rate policy.
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The Federal Reserve Board expects bond purchases to end by mid-2022 | WGN Radio 720
Source link The Federal Reserve Board expects bond purchases to end by mid-2022 | WGN Radio 720