Source: Federal Reserve
The United States Federal Reserve will start scaling back its bond-buying program later this month, indicating a pullback from the assistance it released amid the COVID-19 pandemic.
- The Federal Open Market Committee in a statement following its latest meeting said the tapering will begin later this month.
- The tapering will involve $15 billion monthly from the current $120 billion, including a reduction of $10 billion in the Treasurys, and $5 billion in mortgage-backed securities.
- The reduction in the bond-buying program comes as the Fed deemed that the economy has made “substantial further progress” toward its goals.
- The statement was approved unanimously, and noted that the Fed is not on a predetermined course, and adjustments may be made if necessary.
- Officials also stressed that while inflation remains elevated, drivers are expected to be transitory given the imbalances due to the pandemic and the reopening of the economy.