Business

Clarida says Fed bond purchases will stay paced for the rest of the year

Richard Clarida

Scott Murin | CNBC

Federal Reserve Board Vice-Chairman Richard Clarida said he hopes the central bank will maintain the pace of asset purchases throughout the 2021 balance.

“My economic outlook is in line with maintaining the current pace of purchases for the rest of the year,” he said in a presentation on Friday.

Currently, the Fed buys at least $ 120 billion a month, divided into a minimum of $ 80 billion in US Treasuries and $ 40 billion in mortgage-backed securities. The pace of purchases is accelerating through the Covid-19 pandemic as an ongoing effort to maintain both economic growth and market functioning.

The market is wondering how long the Fed will continue its program, given that the Fed’s holdings are currently over $ 7 trillion.

Clarida said Friday that there will be no setback at any time this year, despite expecting growth to accelerate.

In a session moderated by CNBC’s Steve Riesman, “I think it will take a while to think about slowly slowing down purchases from a data perspective. I’m relatively optimistic about the economic outlook.” Added. .. “We want to move the labor market further and move towards the 2% inflation target, so I think it’s a few ways before we declare victory.”

The Federal Reserve Board of Governors keeps its options open as the economy progresses throughout the year, but Clarida works on officials reaching and perhaps exceeding inflation targets, and full inclusive employment. I said that I am.

After the December meeting, the Fed promised to continue its asset purchase program until substantial progress was made towards mandates. Earlier this week, Atlanta Fed Governor Rafael Bostic said he wouldn’t be surprised if the pace of bond purchases slowed by the end of the year.

“For now, I think it’s my expectation to maintain the current pace of purchases throughout the rest of the year,” Clarida said.

Clarida says Fed bond purchases will stay paced for the rest of the year

Source link Clarida says Fed bond purchases will stay paced for the rest of the year

Back to top button