Federal Reserve policy makers will still be injecting roughly $1 trillion into markets during the time it takes to start and end the tapering of $120 billion in monthly bond purchases, according to strategists.
That assumes an announcement comes in December and it takes eight months to complete the pullback, strategists Teresa Ho and Alex Roever at JPMorgan Chase & Co. JPM, +0.62% wrote in a note released Sunday, reiterating similar views they made on Aug. 6.
Amid this week’s start to the Kansas City Federal Reserve’s annual symposium, investors will be keeping a close eye on when and by how much the central bank might be paring back on its purchases — which many regard as scaling back on stimulus. The Dow Jones Industrial Average DJIA, +0.09% and S&P 500 index SPX, +0.15% booked their worst declines in a month on Aug. 18 after Fed minutes showed most officials backing a start of tapering this year.
But as JPMorgan’s note points out, the Fed would still be supplying stimulus — just at a reduced pace — and the abundance of a cash already in the system will still keep growing. “We continue to think a tapering announcement would come in December, though the risk of an announcement in November has increased,” the strategists wrote. “Realistically, the timing difference between November and December is $120bn/mo. more in asset purchases.” Assuming the Fed finishes tapering next August, “this still means that we could see anywhere from $850bn to $1tn of additional liquidity being injected in the financial system.
The strategists also weighed in on Fed Chairman Jerome Powell’s future, by reiterating JPMorgan’s view that there’s “a significant chance” he won’t be renominated when his term ends in February 2022.
Brasil Últimas Notícias, Brasil Manchetes
Similar News:Você também pode ler notícias semelhantes a esta que coletamos de outras fontes de notícias.
Goldman Sachs raises odds on U.S. Fed taper announcement in NovGoldman 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.
Consulte Mais informação »
These taper-tolerant stocks should do well even if the Fed removes stimulus, traders sayInvestors may be wary of a tapering Federal Reserve, but these stocks could be a good hedge, according to traders.
Consulte Mais informação »
Fed Chairman Powell Navigates the Inflation DebateThe Federal Reserve confers this week, and Mr. Powell is expected to clarify the central bank’s position. He battles internal dissension over how to proceed, and a haywire economic recovery hampered by the Delta variant.
Consulte Mais informação »
Treasury yields start the week higher with key Fed policy event in focusU.S. Treasury yields rose on Monday morning, with investors focusing on the Federal Reserve's annual central banking event, due to be held later in the week.
Consulte Mais informação »
The founder of a $1 billion fitnesswear brand once felt too young to be CEO. Now he’s back in the roleThe founder of a $1 billion fitnesswear brand once felt too young to be CEO. Now he’s back in the role (via CNBCMakeIt)
Consulte Mais informação »
Euro Near Nine-Month Low as Fed, ECB Policies DivergeThe euro is trading near its lowest level against the dollar in nine months as investors bet that the eurozone will maintain lower interest rates and have a slower economic recovery than the U.S.
Consulte Mais informação »