Washington, December 1, 2008 : Jerome Powell, Chairman of the US Federal Reserve, has stated that it is appropriate to reconsider ending the taper of asset purchases by the central bank “a few more months” in light inflation pressures. Powell told lawmakers Tuesday that the economy is strong and inflationary pressures have increased.
He suggested that the taper of asset purchases be stopped.perhaps a few more months earlier.
He said, referring specifically to the Fed’s December 14-15 policy meeting.
In November, the Fed began to reduce its $120 billion monthly asset purchase program by $15 billion.
According to Xinhua news agency, the Fed would stop buying assets at this rate by June 2022.
According to minutes of the Fed’s November policy conference, although Fed officials generally supported the plan for asset purchases to be reduced by $15 billion per month, some Fed officials desired a faster pace to allow the central bank to raise rates sooner.
Christopher Waller, Fed Governor, has urged the central banking to accelerate the pace of selling assets to reduce inflation.
Waller stated that Waller was influenced by the rapid improvement in the labor markets and the declining inflation data to favor a faster pace for tapering and a quicker removal of accommodation in 2022.
According to the US Labor Department, the consumer price index (CPI), rose 6.2% in October from 2020.This is the largest annual gain in over 30 years.
Powell stated that the recent increase in Covid-19 cases as well as the emergence Omicron variant pose downside risk to US employment, economic activity, and increased uncertainty about inflation.
He said that greater concerns about the virus could decrease people’s willingness and desire to work in person.This would slow progress in labor market and intensify supply chain disruptions.
int/khz/ #taper #earlier
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