Fed Chairman Jerome Powell estimates that the US Federal Reserve is expected to reduce bond purchases by the end of the year.

Speaking at a conference in Jackson Hall today, Powell said the U.S. economy has reached a point where it no longer needs such significant support from the Fed (quantitative easing and zero interest rates). However, he does not yet expect an interest rate hike anytime soon.

Regarding the level of einflation High (more than 5% in the last 12 months), Powell reiterated that this is a temporary situation and the long.term inflation rate is about 2%, the Fed’s target.

Today, the Fed purchases about $ 120 billion in bonds every month.

Powell defended Fed policy and stressed that the U.S. unemployment rate is still high (5.4% today compared to 14.8% in April 2020 with the outbreak of the corona plague). “It is important not to make mistakes and reduce support for the economy too soon,” he said.

Following Powell’s remarks, gains on Wall Street are strengthening and stock indices are climbing 0.6% .0.7%.

By Editor

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