MSN - AP World http://syn2.thecanadianpress.com:8080/mrss/feed/fcf7391a2f354311807f0501c16bde6a MSN - AP World Copyright © 2010-2018 The Canadian Press. All rights reserved. http://www.rssboard.org/rss-specification Mon, 29 Nov 2021 12:23:53 +0000 Fed: On track to slow support for economy http://syn2.thecanadianpress.com:8080/mrss/feed/fcf7391a2f354311807f0501c16bde6a/42e818d76639436284567c84fceb4a2a Federal Reserve Chair Jerome Powell signaled Wednesday that the Fed plans to announce as early as November that it will start withdrawing the extraordinary support it unleashed after the coronavirus paralyzed the economy 18 months ago. (Sept. 22) 42e818d76639436284567c84fceb4a2a Wed, 22 Sep 2021 23:03:16 +0000 SHOTLIST:RESTRICTION SUMMARY:++GRAPHICS ON SCREEN FROM SOURCE++US NETWORK POOLWashington, DC - 22 September 20211.  Various of Federal Reserve Board Chairman Jerome Powell holds news conferenceANNOTATION: Fed: On track to slow support for economy2. SOUNDBITE (English) Jerome Powell, Federal Reserve Board Chairman:"Today, the Federal Open Market Committee kept interest rates near zero and maintained our current pace of asset purchases. These measures, along with our strong guidance on interest rates on and on our balance sheet, will ensure that monetary policy will continue to support the economy until the recovery is complete."++WHITE FLASH++3. SOUNDBITE (English) Jerome Powell, Federal Reserve Board Chairman:"If progress continues broadly, as expected the committee judges that a moderation in the pace of asset purchases may soon be warranted." ++WHITE FLASH++4. SOUNDBITE (English) Jerome Powell, Federal Reserve Board Chairman:"Substantial further progress toward our goals is the test for beginning the taper and the taper takes some months in, everyone's figuring. So, you're going to be well away from satisfying the lift off test when we begin to taper."  ++WHITE FLASH++5 . SOUNDBITE (English) Jerome Powell, Federal Reserve Board Chairman:"It is the accumulated progress. So, you know, for me, it wouldn't take a knockout, great, super strong employment report. It would take a reasonably good employment report for me to feel like that test is met. And others on the committee, many, many on the committee, feel that the test is already met." ++WHITE FLASH++6. SOUNDBITE (English) Jerome Powell, Federal Reserve Board Chairman:"I think if the economy continues to progress broadly in line with expectations, then I think and also the overall situation is appropriate for this, then I think we could easily move ahead at the next meeting or not, depending on whether we whether we feel like that those tests are met."++EDIT ENDS ON SOUNDBITE++STORYLINE:Federal Reserve Chair Jerome Powell signaled Wednesday that the Fed plans to announce as early as November that it will start withdrawing the extraordinary support it unleashed after the coronavirus paralyzed the economy 18 months ago. Powell said that if the job market maintained its steady improvement, the Fed would likely begin slowing the pace of its monthly bond purchases. Those purchases have been intended to lower longer-term loan rates to encourage borrowing and spending. "I think if the economy continues to progress broadly in line with expectations," the Fed chair said at a news conference, "I think we can easily move ahead at the next meeting" in November.At the same time, the Fed's policymaking committee indicated Wednesday that it expects to start raising its benchmark rate sometime next year - earlier than the members had envisioned three months ago and a sign that they're concerned that high inflation pressures may persist. Powell stressed, though, that a rate hike would occur only after the Fed had ended its bond purchases, a process that he said would likely last through the middle of next year.Taken together, the Fed's plans reflect its belief that the economy has recovered sufficiently from the pandemic recession for it to soon begin dialing back the emergency aid it provided after the pandemic erupted. As the economy has steadily strengthened, inflation has also accelerated to a three-decade high, heightening the pressure on the Fed to pull back.The central bank's pullback in bond purchases and its eventual rate hikes, whenever they happen, will mean that some borrowers will have to pay more for mortgages, credit cards and business loans.Stock and bond traders took the Fed's message Wednesday in stride. The Dow Jones Industrial Average, which had been up more than 400 points before the Fed issued a policy statement, closed up 338 points, or a full 1%. The yield on the 10-year Treasury note was all but unchanged at roughly 1.31%.The economy has recovered faster than many economists had expected, though growth has slowed recently as COVID-19 cases have spiked and labor and supply shortages have hampered manufacturing, construction and some other sectors.The U.S. economy has returned to its pre-pandemic size, and the unemployment rate has tumbled from 14.8%, soon after the pandemic struck, to 5.2%.At the same time, inflation has surged as resurgent consumer spending and disrupted supply chains have combined to create shortages of semiconductors, cars, furniture and electronics. Consumer prices, according to the Fed's preferred measure, rose 3.6% in July from a year ago - the sharpest such increase since 1991. In its updated quarterly projections, Fed officials now expect to raise their key short term rate once in 2022, three times in 2023 - one more than they had projected in June - and three times in 2024. That benchmark rate, which influences many consumer and business loans, has been pinned near zero since March 2020, when the pandemic erupted.The central bank had signaled last year that it would likely start tapering its $120 billion-a-month in purchases of Treasurys and mortgage bonds once the economy had made "substantial further progress" toward the Fed's goals of maximum employment and 2% average annual inflation."If progress continues broadly as expected, the Committee judges that a moderation in the pace of asset purchases may soon be warranted," the Fed said in the statement it issued after its two-day meeting ended.Inflation has risen enough to meet the Fed's test for substantial progress. And Powell said at his news conference that in his view, employment has "all but met" that test, too.The Fed hasn't hinted at how fast it will taper the purchases. But it is widely expected to pare its purchases of Treasurys by $10 billion a month and mortgage-backed securities by $5 billion. The Fed's expected policy changes follow similar steps by other central banks in the developed world as growth and inflation have picked up in many countries. The European Central Bank said earlier this month that it would reduce its bond purchases, though it has yet to say that it will fully end them. The central banks of Canada and Australia have also scaled back bond purchases.===========================================================Clients are reminded: (i) to check the terms of their licence agreements for use of content outside news programming and that further advice and assistance can be obtained from the AP Archive on: Tel +44 (0) 20 7482 7482 Email: info@aparchive.com(ii) they should check with the applicable collecting society in their Territory regarding the clearance of any sound recording or performance included within the AP Television News service (iii) they have editorial responsibility for the use of all and any content included within the AP Television News service and for libel, privacy, compliance and third party rights applicable to their Territory. Federal Reserve Chair Jerome Powell signaled Wednesday that the Fed plans to announce as early as November that it will start withdrawing the extraordinary support it unleashed after the coronavirus paralyzed the economy 18 months ago. (Sept. 22) Fed: On track to slow support for economy