Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Fed likely to announce taper in November, former Fed official says

EconomySep 03, 2021 01:30AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

By Lisa Pauline Mattackal

(Reuters) - omThe U.S. Federal Reserve is likely to announce the tapering of its asset purchases in November and begin the process a month later, former Federal Reserve official Dennis Lockhart said on Thursday.

Waiting until November will give policymakers more data on the labor market's recovery and economic growth, Lockhart told the Reuters Global Markets Forum (GMF).

But Lockhart, president of the Atlanta Fed from 2007 to 2017, warned "a particularly bad next two months" could postpone this timeline.

The Fed's September meeting will be the first since the Jackson Hole symposium where Chairman Jerome Powell only said tapering could be "this year."

Fed policymakers will also release their summary of economic projections at the September meeting, which Lockhart said they may want to get "out of the way" before giving a taper schedule.

The economic projections "could present a picture not entirely consistent with the tapering decision in some respects," he said.

Lockhart was "agnostic" on the route the central bank might take to unwind its $120 billion worth of monthly bond purchases -- whether by following the post-Great Recession playbook and first cutting back Treasury purchases, or leading with mortgage-backed securities to calm a red-hot housing market.

Lockhart believes financial markets should absorb tapering without much volatility, but that the Fed should worry about persistent market unrest if it spills into the real economy.

Lockhart, currently Senior Fellow at the Harvard Kennedy School, sees inflation as transitory "for now".

These price pressures could last through 2022, making it vital to manage inflation expectations, he said.

Despite some calls for the Fed to focus more on green policies, Lockhart believes the central bank's current mandate should not be changed.

Two policymakers told GMF the onus of promoting green investments https://reut.rs/3kvgWhj should lie with governments and not central banks https://reut.rs/3DARRdA.

Lockhart also noted that the Fed was serious in addressing inequality, particularly employment among women and minorities.

"The "inclusion" word ... signals an important change in the (Fed's) mentality."

(This interview was conducted in the Reuters Global Markets Forum, a chat room hosted on the Refinitiv Messenger platform. Sign up here to join GMF: https://refini.tv/33uoFoQ)

Fed likely to announce taper in November, former Fed official says
 

Related Articles

ECB's Lagarde pushes back on market rate-hike bets
ECB's Lagarde pushes back on market rate-hike bets By Reuters - Oct 28, 2021 2

By Balazs Koranyi and Francesco Canepa FRANKFURT (Reuters) -European Central Bank President Christine Lagarde pushed back on Thursday against market bets that runaway inflation...

European shares flat as ECB maintains status quo
European shares flat as ECB maintains status quo By Reuters - Oct 28, 2021

By Anisha Sircar and Ambar Warrick (Reuters) -European stocks struggled for direction on Thursday on a batch of mixed earnings reports, as the European Central Bank kept its...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Me comment
Me comment Sep 03, 2021 2:17PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Won't start until first quarter of 2022 is a safer bet.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email