Fed inches closer to tapering in 2022

The US Federal Reserve opened the door more and more to what is known as tapering on Wednesday, then it will begin to withdraw its massive bond-buying program to stimulate the economy.
While Fed chairman Jerome Powell said the Fed's inflation criteria had been met and the goal of expanding employment growth to the whole economy was “almost met” its standards, the health crisis still poses a risk to economic recovery ... at least for now.
"While no decisions were made, participants generally felt that a gradual process of wind-down, which will be completed around the middle of next year, is likely to be appropriate as long as the recovery remains on track."
Powell says an announcement could be made as early as the November Fed meeting, but that depends on what happens to the job market. While the Fed is pleased with the progress, the sharp slowdown in hiring in August and the ongoing labor shortage are cautionary stories the Fed stands ready to watch for a month or two.
The Fed is also threatened with the possibility of the federal government failing to reach an agreement on raising the debt ceiling by October and defaulting its debt for the first time in the nation's history.
Powell warned of the devastating effects this could have.
“Failure to do so can lead to violent reactions, and cause serious damage to the economy and financial markets. Anyone else can protect the markets or the economy in the event of failure, protect it completely if we fail to ensure that we get this debt when it comes due settle. "
As long as a debt crisis is avoided and the economic recovery stays on track, the Fed seems comfortable and ready to do less "soon" ...
Half of the politicians predict a rate hike in 2022.
In this article:
Jerome Powell
American banker

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