Federal Reserve to start tapering asset buys by $15 billion per month later this month

WASHINGTON. The Federal Reserve said it will begin winding down its monthly asset purchases later this month at a pace of $15 billion per month, starting the withdrawal of last year’s emergency pandemic support, while expressing less certainty that the jump in inflation will prove temporary.

The Fed said it would reduce Treasury purchases by $10 billion and mortgage-backed securities by $5 billion, marking the beginning of the end of the programme aimed at shielding the economy from Covid-19. The Federal Open Market Committee decided yesterday following a two-day meeting to maintain the target range for its benchmark policy rate at zero to 0.25 per cent. The decision was unanimous.

The dollar declined, 10-year yields pared earlier gains and the S&P 500 reversed losses.