William Dudley, the Former President and Chief Executive Officer of the Federal Reserve Bank of New York, said at a virtual event on Thursday, he believes the US central bank will kick off tapering at its next policy meeting, adding that there is a possibility of much sooner than expected Fed rate hike.
Key quotes
"The Fed set two standards for beginning tapering – substantial progress toward its goal of 2 percent inflation and maximum employment, or whittling away the number of people unemployed following the pandemic.”
“Unless something radical changes ahead of the next Fed meeting on Nov 2-3, the central bank will likely shave as much as US$15 billion a month from its planned monthly purchases of Treasury bonds and mortgage-backed securities.”
“The main risks to the market outlook included a change in perceptions of the duration of inflation and the jobs market in the US.”
The Fed "is definitely of the view that the inflation pressures we see today are not going to be long-lasting – whether they are right nor not remains to be seen.”
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