The Fed decided to begin reducing net asset | 04 Tháng mười một 2021

04 Tháng mười một 2021, GBP/USD

The Fed decided to begin reducing net asset

GBPUSD trading plan:

The Federal Reserve said it will begin trimming its monthly bond purchases in November. The Federal Open Market Committee announced it will start tapering its asset purchases beginning in mid-November. It cut the pace by $15 billion per month with $10 billion coming from its Treasuries purchases and $5 billion coming from its mortgage backed securities purchases. The monthly purchases beginning in mid-November will be $70 billion in Treasuries and $35 billion in MBS. Beginning in mid-December, the pace will be $60 billion of Treasuries and $30 billion of MBS. At this pace, the Fed should be done with its asset purchases by mid-June. The policy statement said the summer rise in COVID cases created a bit of a lull in economic activity. The factors pushing inflation higher are ‘expected to be transitory.’ That shows a chink in their confidence that it is indeed transitory. The Fed is trying to change the word of the day from “transitory” to “flexible.” It has flexible average inflation targeting and its willing to be flexible with its asset purchases and even the date of lift-off for rates, depending on how permanent transitory ends up being.

Investment idea: buy 1.3660 and take profit 1.3725.

David Johnson
Analyst of «FreshForex» company
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