2021 September Monthly Market Outlook
Fed Signals Tapering Announcement This Year
The Federal Reserve held their Jackson Hole Economic Policy Symposium, entitled “Macroeconomic Policy in an Uneven Economy” last Friday (27 Aug). The most important speech was by Chairman Powell, when he delivered opening remarks to kick-off the event. Markets had anticipated this speech for months now in expectation of getting a signal about the start date of a gradual reduction, or “taper”, of the Fed’s US$120bn in net new monthly Treasury and MBS purchases (known as Quantitative Easing or “QE”). Powell’s remarks appear to signal that a formal taper announcement may occur this year, but he left the formal announcement date open.