Fed upgrades its outlook but tapering and liftoff are not in the radar

Summary

The Fed acknowledged that economic conditions have improved but the recovery remains uneven and incomplete. As we expected, the Fed left interest rates unchanged, maintained the monthly pace of asset purchases and kept its forward guidance unaltered.

Key points

• Key points:
• One-time price increases will only have transitory effects on inflation
• Discussions on tapering likely to start in the summer; tapering to begin in 2022
• Control of the virus remains critical to achieve a full economic recovery

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