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Fed announces start of tapering

At the November meeting, the Federal Reserve (Fed) announced it would start tapering its asset purchases this month
04 November 2021
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    Key takeaways:

    • At the November meeting, the Federal Reserve (Fed) announced it would start tapering its asset purchases this month
    • Inflation remains elevated, largely reflecting factors that are expected to be transitory. The Fed sees inflation declining from Q2 or Q3 2022
    • The labour market has recovered enough to warrant tapering, but there remains some ground to cover to reach maximum employment and the Fed will be patient regarding rate rises
    • With the economy in an expansion phase and the Fed now tapering, yields have the potential to rise further
    • The potential for higher yields means we are also selective in our exposure to risk assets