Fed to shutter pandemic support asset purchases by end-2022
By Administrator_ India
The Federal Reserve will shutter its asset purchases program by the end-2022, according to a Reuters poll, with a few more economists now predicting a rate hike as early as next year, but they pegged new COVID-19 variants as the biggest economic risk.
However, Fed chair Jerome Powell said on Wednesday withdrawing monetary policy support was a long way off, with 7.5 million jobs still missing from before the pandemic.
Following his testimony, where he also concluded that high inflation would be transitory, the US 10-year yield and the greenback declined, while stocks rose.
The July 12-15 poll of over 100 economists showed the US economy would grow at a healthy pace and also that elevated inflation would prevail longer than previously expected.
Last month, a majority of economists had predicted the Fed would announce a taper plan to its $120 billion monthly asset purchases sometime this year, with the withdrawal to start early next year.
All but two of 41 economists who answered an additional question said the Fed will have completely stopped its pandemic support bond buys by the end-2022.
That included three economists who expected a complete withdrawal by the end of this year.