August 27, 2021

Will The Fed Start Tapering In The Near Future?

 Kansas City Fed President Esther George in one of the interviews informed that the economy has reached an ideal level, where the central bank can already withdraw the measures implemented.

Among the early steps that can be expected is that the Fed is likely to reduce its monthly asset purchase rate or better known by the term ‘tapering’. Even so George did not set a specific date on when the process would take place.

George emphasized that this did not mean that the administration would move to a neutral or tighter policy but tapering was the first step. So far the economy has shown signs that it has achieved that which requires more progressive measures.

Policymakers have set important benchmarks as an indication that they will reconsider monetary policy to almost zero.

This view was voiced by George in the Fed’s Jackson Hole online conference. These conferences often result in significant policy developments, and this year will likely feature important discussions on reducing bond purchases.

For example, the Fed is currently examining the impact of bond cuts and economic data.