The debt reduction will be accelerated from January next year, and the short-term balance sheet still has capital momentum As expected by the market, this meeting officially announced that it will accelerate the reduction of monthly bond purchases from January next year, and implement it at a rate of monthly reduction of 30 billion (20 billion U.S. bonds, 10 billion MBS), and is expected to end bond purchases around March next year. . The Fed has communicated with the market many times before, and the accelerated debt reduction path is also in line with market expectations, and monthly bond purchases will continue to push the Fed's balance sheet to the 8.8 trillion water level, giving market funds in the next quarter. Note. image5 Photo Credit: Finance M Squared image4 Photo Credit: Finance M Squared 4.
Summary of the press conference Economy and Inflation Powell believes that U.S. consumer spending is currently very strong, as people are returning to work, wages are also increasing, and overall incomes have grown significantly, supporting Q4 personal consumption whatsapp list expenditures remain strong. However, the hot job market and demand, as well as the tight supply chain, also make the inflation data very high, so that the Federal Reserve needs to start to accelerate the debt reduction to avoid inflation expectations being anchored at too high levels.
Accelerate the tapering of bond purchases The reporter asked, how to solve the current inflation problem if we continue to purchase assets now, even if the purchase speed is slowed down. Powell said the Fed believes that the adjustment of the balance sheet should be carried out in a cautious and methodical manner, because the market is very sensitive to this, and the debt reduction is currently at twice the rate, and there are two meetings before the full stop of bond purchases. , the members deem appropriate and in line with market expectations.