Philadelphia Fed President Patrick Harker on Wednesday gave an insight into the economic outlook for the future. He personally thinks that the massive asset purchase by the Federal Reserve (the Fed) has helped stabilize the market since the pandemic outbreak but it is time to reduce it.
Harker in the statement wrote that tends to be a confident party that it’s time to tap the $ 120 billion in monthly purchases of Treasury bills and mortgage -backed securities.
Harker said he expects the U.S. economy. will grow around 6.5% in 2021 and then growth becomes “moderate” to around 3.5% in 2022.
The Fed official also expects inflation to be around 4% for 2021 before dropping to 2% in 2022. This is because there are indications that used car prices are starting to stabilize.
He also warned of the negative impact on the economy in the short term if Congress fails to raise the debt limit as it could significantly hamper economic growth.
The US dollar index, which measures the greenback against six major currencies, strengthened 0.52% to a trading level of 94.270 following expectations of tapering towards the end of the year.
