July 09, 2021 | 14:02
The Fed’s MPR: “We’re Still Not Sure”
The Federal Reserve’s latest Monetary Policy Report contained little new news. So why do I bother mentioning it in this space? To emphasize that the central bank, despite admitting that “yes, we are talking about tapering”, well, frankly, the FOMC is also quite in a fog about when things will transpire to allow this big step (we still think it will be this fall).
They will continue to “assess” the economy’s progress “in coming meetings” (when else would they do it?), and warned that things (such as the job market) will look different when all of this is over. It was interesting that it noted how retirements were weighing on the part rate.
But, upside risks to the inflation outlook have increased, at least, over the near-term and longer-term inflation expectations are also higher. So if you place all members of the FOMC on a see-saw, I would imagine that the side leaning towards tapering sooner is starting to outweigh the rest.
Let’s see what happens at Fed Chair Powell's testimony next week.