Members of the US Federal Reserve (Fed) have made a series of remarks suggesting that the large-scale asset purchases introduced as a response to the COVID-19 crisis can be reduced from next month.
According to Reuters and Bloomberg News on the 12th (local time), Fed Vice Chairman Richard Clarida said at the International Finance Association's (IIF) annual meeting held online on the 12th (local time), "The criterion of 'significant further progress' is more than met with respect to the price stabilization target. , in terms of maximum employment, it is almost met," he said.
'Significant further progress' is the term the Fed put forward as of December of last year when it began tapering its asset purchases.
At the time, the Fed said it would continue to buy assets until significant further progress toward its maximum employment and price stability targets was reached.
The Fed is buying 120 billion dollars (about 144 trillion won) of U.S. Treasury bonds and mortgage-backed securities (MBS) every month to prevent the economic downturn caused by the COVID-19 crisis.
As the U.S. economy continues to recover despite the re-spread of COVID-19 and consumer prices exceed the target of 2%, expectations are being raised that the Fed will withdraw its ultra-accommodative monetary policy.
Clarida's remarks today show the Fed could taper next month, as market expected, Reuters said.
"I think progress has been made," said Rafael Bostic, president of the Atlanta Federal Reserve, another Fed member, in an interview with the Financial Times.The faster we move, the better."
At an event hosted by the Peterson Institute for International Economics (PIIE), a US think tank, he diagnosed that the current financial market has abundant liquidity, so tapering is unlikely to have a negative impact on the market and economy.
Louis Fed President James Bullard told CNBC that he hopes the tapering will end in the first quarter of next year so that he can act if he has to raise rates next spring or summer.