By Andrey Dashkov, analyst, Casey Research
This week, Wall Street is watching the Fed.
On August 27, the country’s arguably most powerful financial institution provided the market with a clue as to how fast it would start tapering its asset purchase program.
In other words, we learned how soon the Fed is going to stop providing the market with a massive amount of support.
The majority of Fed officials believe that this “tapering” should start this year.
Fed Chair Jerome Powell said:
[…] I was of the view, as were most participants, that if the economy evolved broadly as anticipated, it could be appropriate to start reducing the pace of asset purchases this year.
Why would they stop this massive support program? Because, the theory goes, the economy is picking up, and the high inflation numbers we’re seeing are transitory.