Braking Down The News

Fed Worried About Inflation Risk as It Firmed Up Tapering Plan

Central bank prepares to begin reducing asset purchases next month and eyes end to stimulus program by mid-2022

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Federal Reserve officials last month worried that disrupted supply chains were raising the risks of more persistent inflation as they firmed up plans to reduce their bond-buying stimulus program next month and conclude it by the middle of next year.

Minutes of their Sept. 21-22 Fed meeting, released Wednesday, revealed a stronger consensus over scaling back the $120 billion in monthly purchases of Treasury and mortgage securities amid signs that higher inflation and strong demand could call for tighter monetary policy next year. The bond purchases have been a key piece of the Fed’s effort to stimulate growth since the coronavirus pandemic disrupted the U.S. economy last year.

 

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