Fed expected to stay cautious as economy sends mixed signals

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AFP, Washington :
With the United States on the upswing from the Covid-19 pandemic, the Federal Reserve is expected to weigh in next week on whether the economy is healthy enough to begin withdrawing stimulus measures credited with aiding the revival.
But the two-day meeting of the central bank’s policy-setting Federal Open Market Committee (FOMC) beginning Tuesday ultimately may be a static event, like many others in recent months.
Analysts do not expect the Fed to immediately begin the much-expected slowing of its massive bond purchases, and while the committee will release updated economic forecasts, few big changes are expected from previous estimates released three months ago.
The FOMC “likes to prepare markets for any major change,” said Joe Brusuelas, chief economist at RSM US.
When he addresses the press after the meeting, Fed Chair Jerome Powell “may choose the opportunity to signal that the tapering is coming, which would likely be a November announcement with a December start,” the economist said.

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