Fed to kick off faster tapering plan from January - Goldman Sachs
The U.S. Federal
Reserve will likely double the pace of tapering its monthly bond purchases from
January to $30 billion, and wind down its pandemic-era bond buying scheme by
mid-March, Goldman Sachs strategists said in a daily note on Thursday.
"The increased openness to
accelerating the taper pace likely reflects both somewhat higher-than-expected
inflation over the last two months and greater comfort among Fed officials that
a faster pace would not shock financial markets," analysts led by Jan
Hatzius said in a client note.
Despite the accelerated tapering
calendar, Goldman expects the Fed to start raising interest rates only from
June for a total of three times in 2022. The U.S. investment bank is one of the
several banks which have recently raised their interest rate hike expectations
for 2022 to three from two.
Minutes of the central bank's Nov.
2-3 policy meeting showed that various policymakers said they would be open to
speeding up the taper of their bond-buying programme if high inflation held and
would move faster to raise rates.