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Goldman Sachs raises odds on U.S. Fed taper announcement in Nov

Published 08/24/2021, 07:40 AM
Updated 08/24/2021, 10:01 PM
© Reuters. FILE PHOTO: The Goldman Sachs company logo is on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 13, 2021.  REUTERS/Brendan McDermid/File Photo

© Reuters. FILE PHOTO: The Goldman Sachs company logo is on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 13, 2021. REUTERS/Brendan McDermid/File Photo

LONDON (Reuters) -Goldman Sachs economists have raised the odds that the U.S. Federal Reserve will announce the start of tapering its bonds purchases in November, predicting the central bank will likely opt to dial back purchases by $15 billion then and at meetings that follow.

In a note, the investment bank said it had raised the odds that a formal taper announcement will come in November to 45% from a previous forecast of 25%, and lowered the December chance to 35% from 55%.

According to Goldman, a $15 billion per meeting total pace of tapering would likely be split between $10 billion of U.S. Treasuries and $5 billion of mortgage-backed securities.

"A November announcement coupled with a $15bn per meeting pace would mean that the FOMC would make the final taper at its September 2022 meeting," the Goldman Sachs (NYSE:GS) analysts said in a note dated Aug 18, referring to the Fed's Federal Open Markets Committee.

© Reuters. FILE PHOTO: The Goldman Sachs company logo is on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 13, 2021.  REUTERS/Brendan McDermid/File Photo

The timing and pace of the unwinding of Fed stimulus is a key focus for markets, with recent robust jobs data boosting talk that a taper could come sooner rather than later.

But with the COVID-19 Delta variant spreading across the United States and supply chain disruptions persisting, many economists are lowering their growth outlooks. And a still uncertain outlook means the Fed may prefer to err on the side of caution in its tapering timeline.

Latest comments

ya the fed could say they are tapering tomorrow and I won't blink I'll keep watching the 10 year to see what's really going on.
No way.  Fake news
Powell will kick can down the road. Its a pattern.
Anything GS gives out for free advice is misinformation
Do you remember the boy and tiger story, sometimes it can be true
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