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.
