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Fed announces start of tapering

At the November meeting, the Federal Reserve (Fed) announced it would start tapering its asset purchases this month
04 November 2021
    Download the full reportPDF, 404.85KB

    Key takeaways:

    • At the November meeting, the Federal Reserve (Fed) announced it would start tapering its asset purchases this month
    • Inflation remains elevated, largely reflecting factors that are expected to be transitory. The Fed sees inflation declining from Q2 or Q3 2022
    • The labour market has recovered enough to warrant tapering, but there remains some ground to cover to reach maximum employment and the Fed will be patient regarding rate rises
    • With the economy in an expansion phase and the Fed now tapering, yields have the potential to rise further
    • The potential for higher yields means we are also selective in our exposure to risk assets