Washington, Oct 31 (AFP/APP):The Federal Reserve is set to begin removing a major plank of the stimulus policies it rolled out last year as the pandemic began, a sign of the progress the US economy has posted since the historic downturn.
While the American central bank is always capable of surprises, its top officials have widely signaled that they will announce at their policy meeting next week the start of a drawback in their monthly purchases of bonds and securities, which they began as the economy collapsed in March 2020 to stop the crisis from becoming a catastrophe.
The world’s largest economy has undoubtedly come a long way from those dire days, but with an unpleasant passenger: inflation, which has spiked throughout much of this year, and caused some economists to name the Fed’s easy money policies as an accessory.
Fed Chair Jerome Powell could touch on these topics when he speaks following the two-day Federal Open Market Committee meeting beginning Tuesday, and may also offer the central bank’s latest views on the state of the recovery.
“I think it’ll be one of the biggest surprises in a long time if they didn’t taper. They’ve been about as explicit as you can hope the Fed will ever get about a future action,” Michael Feroli, chief US economist at J.P. Morgan, told AFP.
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