Federal Reserve Announces Start Of Asset Taper, Leaves Rates Untouched


The Federal Reserve announced Wednesday that it would begin reducing its monthly asset purchases this month in a move widely anticipated by markets.

In a statement detailing the results of its two-day meeting, the central bank noted the progress the U.S. has made on increasing vaccinations, lower cases of COVID-19 and positive indications that economic activity is returning to normal. In line with these observations, the Fed declared that it would begin trimming its multibillion-dollar, asset-purchase programs. 

The Fed said it will reduce its purchase of U.S. Treasuries to $70 billion and those of agency mortgage-backed securities by $10 billion this month. In December, it predicts that the Treasury purchases will decrease again to $60 billion and the other securities by $5 billion. 

It explained that it will be taking this gradual approach to give itself leeway in case new risks emerge that would require swift action.  

“The Committee judges…

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