• 325
  • 44
  • 收藏

Federal Reserve sets plan to start the taper; keeps interest rate near zero

Tiger Newspress2021-11-04

  • The Federal Reserve will reduce its purchases of Treasurys and mortgage-backed securities later this month as it eases off the economic gas.
  • The central bank will reduce its purchase of Treasury securities by $10B per month and MBS by $5B per month from its current monthly rate of at least $80B for Treasurys and $40B for MBS. The Fed had boosted asset purchases at the onset of the pandemic to make sure that credit was readily available when markets froze.
  • The federal funds rate target remains at 0.0-0.25%.
  • All of the voting member of the Federal Open Market Committee voted in favor of the actions.
  • Coming up at 2:30 PM is Chairman Powell's press conference.

The Federal Reserve announced Wednesday it soon will begin reducing the pace of its monthly bond purchases, the first step towards pulling back on the massive amount of help it had been providing markets and the economy.

Tapering of bond purchases will start “later this month,” the policymaking Federal Open Market Committee said in its post-meeting statement. The process will see reductions of $15 billion each month -- $10 billion in Treasurys and $5 billion in mortgage-backed securities – from the current $120 billion a month that the Fed is buying.

The committee said the move came “in light of the substantial further progress the economy has made toward the Committee’s goals since last December.”

The statement stressed that the Fed is not on a preset course and will make adjustments to the process if necessary.

“The Committee judges that similar reductions in the pace of net asset purchases will likely be appropriate each month, but it is prepared to adjust the pace of purchases if warranted by changes in the economic outlook,” the committee said.

The move was in line with market expectations following a series of Fed signals that it would begin winding down a program that accelerated in March 2020 as a response to the Covid pandemic.

Along with the move to taper, the Fed also altered its view on inflations slightly, acknowledging that price increases have been more rapid and enduring than central bankers had forecast.

“Inflation is elevated, largely reflecting factors that are expected to be transitory,” the statement said. “Supply and demand imbalances related to the pandemic and the reopening of the economy have contributed to sizable price increases in some sectors.”

The policymaking Federal Open Market Committee voted not to raise interest rates, a move also expected by the market.

The tie between interest rates and tapering is a vital one, and the statement stressed that investors should not view the reduction in purchases as a signal that rate hikes are imminent.

On the current schedule, the reduction in bond purchases will start later in November and conclude around July 2022. Officials have said they don’t envision rate hikes beginning until tapering is finished, and projections released in September indicate one increase at most coming next year.

Markets, though, have been more aggressive in pricing, at one point indicating as many as three increases next year. That sentiment has cooled off some in recent days as Wall Street anticipated a more dovish Fed as it tries to balance slowing growth and rising inflation.

Inflation has been running at a 30-year high, pushed by a clogged supply chain, high consumer demand and rising wages that have stemmed from a chronic labor shortage. Fed officials maintain that inflation eventually will drift back to their 2% target, but now say that could take longer.

This is a comparison of Wednesday’s Federal Open Market Committee statement with the one issued after the Fed’s previous policymaking meeting on September 22.

Text removed from the September statement is in red with a horizontal line through the middle.

Text appearing for the first time in the new statement is in red and underlined.

Black text appears in both statements.

免责声明:本文观点仅代表作者个人观点,不构成本平台的投资建议,本平台不对文章信息准确性、完整性和及时性做出任何保证,亦不对因使用或信赖文章信息引发的任何损失承担责任。

举报

评论44

  • Mm101
    ·2021-11-04
    Like
    回复
    举报
    收起
    • Mm101
      Dd
      2021-11-04
      回复
      举报
    • Mm101
      Bxcdfjcvg
      2021-11-04
      回复
      举报
    • Mm101
      Gg
      2021-11-04
      回复
      举报
    查看更多 2 条评论
  • Mm101
    ·2021-11-04
    Yes
    回复
    举报
  • AS78
    ·2021-11-04
    Please like and comment, thanks 
    回复
    举报
    收起
    • AS78
      Thanks
      2021-11-04
      回复
      举报
    • 滚股怪
      K
      2021-11-04
      回复
      举报
    • Huathk
      Gd
      2021-11-04
      回复
      举报
    查看更多 2 条评论
  • Orangetrader
    ·2021-11-04
    It's time to buy Citibank
    回复
    举报
  • Pluto891
    ·2021-11-04
    假象
    回复
    举报
  • SSVC
    ·2021-11-04
    Mmm.. Appreciate your response and comments Thanks 
    回复
    举报
    收起
    • SSVC
      [Strong][ShakeHands]
      2021-11-05
      回复
      举报
    • Jackyong84
      Ok
      2021-11-04
      回复
      举报
  • MHh
    ·2021-11-04
    No increase to interest rate so no correction…
    回复
    举报
  • SPOT_ON
    ·2021-11-04
    Like n follow 
    回复
    举报
  • Jialatsia
    ·2021-11-04
    Meep
    回复
    举报
  • Mccoy
    ·2021-11-04
    Well handled so that market is not shocked. A smooth landing.
    回复
    举报
    收起
    • VL505
      Cheers
      2021-11-04
      回复
      举报
  • szueyann
    ·2021-11-04
    Like pls
    回复
    举报
  • Minter
    ·2021-11-04
    Market probably gonna slow down Abit. USD set to rise if market is expecting rate hike to come after taper.
    回复
    举报
  • Apdo77
    ·2021-11-04
    Buy!!!!
    回复
    举报
  • Saramax
    ·2021-11-04
    Inflation high , low interest .. money in the bank 😢
    回复
    举报
  • ping23
    ·2021-11-04
    pls like
    回复
    举报
    收起
    • szueyann
      ok
      2021-11-04
      回复
      举报
  • iceage
    ·2021-11-04
    Ohhhh
    回复
    举报
    收起
    • iceage
      up
      2021-11-04
      回复
      举报
  • 2ee91511
    ·2021-11-04
    So whats next?
    回复
    举报
    收起
    • tanpp2307
      I believe that a correction will really happen soon.
      2021-11-04
      回复
      举报
  • Bull_Lion
    ·2021-11-04
    We know when tapering starts, but what about the tantrum?
    回复
    举报
    收起
    • Bull_Lion
      Taper tantrum
      2021-11-04
      回复
      举报
  • 1nquisit0
    ·2021-11-04
    Please like
    回复
    举报
    收起
    • szueyann
      ok
      2021-11-04
      回复
      举报
    • ken26ksh
      Done
      2021-11-04
      回复
      举报
  • Wanlin927
    ·2021-11-04
    Good 
    回复
    举报
    收起
    • ken26ksh
      Yes 👍 🏻
      2021-11-04
      回复
      举报
 
 
 
 

热议股票

 
 
 
 
 

7x24