Fed Chair Powell says he thinks it time to taper, not to raise rates

  
  Analysis

Chair of the Federal Reserve System Powell spoke on Friday, said “I do think it is time to taper”.

He added a ‘not yet’ on rates of course: “I don’t think it is time to raise rates”
Powell wants to see further about market improvement before hiking rates. On inflation:
  • High inflation will likely last well into next year
  • Supply bottlenecks are still weighing
  • If we see persistent inflation we would use our tools
The consensus expectation for the coming taper include:
  • to be announced at this week’s FOMC meeting
  • likely to begin immediately, not waiting until December
  • $15bn /month tapering each month … which would see completion by June 2022
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Last week saw a rising tide in US yields right across maturities.
Chair of the Federal Reserve System Powell spoke on Friday, said “I do think it is time to taper”.
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