Fed officials assess end of asset purchases by mid-2022

Federal Reserve officials are set to agree to start cutting back on their easy money policies in about three months if the economic recovery continues, with some pushing them to end their buying program. active by the middle of next year.

In recent interviews and public statements, many have advocated this timeline, which would allow them to raise interest rates earlier than currently expected if the economy progresses quickly towards their targets.

The central bank said last December that it would continue the current pace of bond purchases until officials conclude they have made “further substantial progress” towards their targets of 2% average inflation and robust job.

Officials at their July 27-28 meeting deliberated on two important questions: when to start cutting their monthly purchases of $ 80 billion in Treasury securities and $ 40 billion in mortgage securities, and how quickly to reduce them or reduce them. The Fed is expected to release the meeting minutes on Wednesday which may provide further clues to the talks.

The answers matter to financial markets, as Fed officials have said they would rather complete the bond purchase program before considering when to raise interest rates near zero. At their June 15-16 policy meeting, 13 of the 18 Fed officials predicted they would hike rates by the end of 2023; seven are expected to do so by the end of 2022.