What is Fed tapering and when will stimulus be reduced in the US?

The US Federal Reserve has agreed to start reducing emergency stimulus to the economy due to the pandemic, commonly known as tapering, is in mid-November or December, but what does this term that has sounded so much in recent days mean?

The famous taper is the gradual slowdown in the pace of large-scale asset purchases by the Federal Reserve. The Fed used asset purchases to maintain economic stability when COVID-19 shut down the US economy in 2020. Since June 2020, the Fed has been buying at least $120 billion in bonds each month.

and that is During the Federal Reserve’s September meeting, Chairman Jerome Powell noted that the November meeting It could set a timetable for lowering taxes in the North American country.

According to the Fed estimates, monthly reductions in the pace of asset purchases will be $10 billion. for Treasury securities and $5 billion for the agency’s mortgage-backed securities.

Mixed shutdown on Wall Street

Given the imminent arrival of “tapering”, Wall Street had a mixed shutdown on Wednesday after the release of US inflation data.Which was higher than what the experts imagined.

in September, The US inflation rate rose to 5.4% at an annual rate, exceeding estimates by a tenth of a percentage point. This was the fifth consecutive month that inflation exceeded 5%.