Federal Reserve Chair Jerome Powell
said it’s appropriate to consider finishing the U.S. central bank’s tapering of asset purchases a few months earlier than previously expected, with inflation
proving more persistent than forecast.
Powell made the comment Tuesday in response to questions during a Senate Banking Committee hearing in Washington. The Fed is currently scheduled to complete its asset-purchase program in mid-2022 under a plan announced at the start of November; policy makers next meet December 14-15, where they could make a decision to accelerate the tapering.
It’s “appropriate in my view to consider wrapping up the taper of our asset purchases, which we actually announced at the November meeting, perhaps a few months sooner,” Powell said.
U.S. stocks extended losses following his comment while yields on 10-year U.S. Treasuries pared their decline.
“We tend to use it to mean that it won’t leave a permanent mark in the form of higher inflation,” Powell said. “I think it’s a good time to retire that word and try to explain more clearly what we mean.”
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