Federal Reserve Chair Jerome Powell at his appearance before the Senate Committee on Tuesday voiced a more hawkish tone comapred to during his last term and said it is time to retire the word “transitory” for inflation.
His statement included the economy is very strong and inflationary pressure is high as well. The central bank could consider to step up efforts in reducing the pace of the monthly asset purchases which could move quicker than the $15 billion a month schedule announced earlier this month. The central banker said the committee would discuss this issue during December meeting.
“At this point, the economy is very strong and inflationary pressures are higher, and it is therefore appropriate in my view to consider wrapping up the taper of our asset purchases, which we actually announced at the November meeting, perhaps a few months sooner,” he said. “I expect that we will discuss that at our upcoming meeting.”
FED earlier announced to wrap up tapering of asset purchases around June next year and if the pace is accelerated it could mean FED could wrap up tapering as early as early Spring. This would also give FED ample time to raise interest rate.
Following Powell’s comments treasuries rose to 1.489 while equities inched down with Dow Jones closing down 652.22 points.
