There is no end to the free money flow
Buyback is a thing to stay for a while
The US Federal Reserve (Fed) is not yet starting to phase out the buy-back program set up to support the coronavirus crisis. But that might happen later this year, Fed President Jerome Powell said at a virtual meeting of US central banks.
The dome of central banks is now buying up $ 120 billion in bonds monthly to support the economy. Now that the US economy and unemployment are improving, there is a growing demand for this support program to be phased out.
That was already on the table at a Fed meeting in July.
“I then believed, like most participants, that if the economy developed as expected, we could begin to phase out,” Powell said today.
Since that meeting, the economy – and especially the decline in employment – has progressed, according to Powell. “But we have also seen a further spread of the delta variant.”The Fed therefore wants to take even more time to analyze the data and risks before announcing a phasing-out of the buy-back program.
Powell’s words have been well received by investors. New York Stock market prices went up a bit further. The same was true of rates in Europe.