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US Fed signals reduction in asset purchasing could start in mid-November or mid-December

10:15 AM Oct 14, 2021 | Agencies

US Federal Reserve could start limiting asset purchases in mid-November or mid-December, according to the minutes of the Federal's recent policy meeting.

"Participants noted that if a decision to begin tapering purchases occurred at the next meeting, the process of tapering could commence with the monthly purchase calendars beginning in either mid-November or mid-December," the Fede said in the minutes of its September 21-22 meeting released on Wednesday.

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"Participants generally assessed that, provided that the economic recovery remained broadly on track, a gradual tapering process that concluded around the middle of next year would likely be appropriate," the minutes said.

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The Fed has pledged to continue its asset purchase program at least at the current pace of $120 billion per month until "substantial further progress" has been made on employment and inflation, reports Xinhua news agency. The central bank will hold its next policy meeting on November 2-3.

Under plans discussed last month, the Fed would taper its $80 billion in monthly Treasury purchases by $10 billion a month, and it would reduce its $40 billion in mortgage-backed securities purchases by $5 billion a month, according to the minutes.

"Participants generally commented that the illustrative path provided a straightforward and appropriate template that policymakers might follow, and a couple of participants observed that giving advance notice to the general public of a plan along these lines may reduce the risk of an adverse market reaction to a moderation in asset purchases," the minutes said.

(With inputs from IANS)

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