Richard Clarida
Scott Mlyn | CNBC
Federal Reserve Vice Chairman Richard Clarida said he expects the central bank to maintain the pace of buying its assets through the 2021 balance sheet.
“My economic outlook is consistent with maintaining the current pace of buying for the remainder of this year,” he told the Council on Foreign Relations at a presentation on Friday.
As things stand, the Fed buys at least $ 120 billion a month, split between at least $ 80 billion in Treasurys and $ 40 billion in mortgage-backed securities . Accelerated pace of purchase through Covid-19 pandemics is an ongoing effort to both sustain economic growth and market activity.
Markets have been wondering how long the Fed will keep the program going as its holdings have now cut $ 7 trillion.
Clarida said Friday it will never see a withdrawal this year although it expects growth to accelerate.
“I think it might be a long time before we think about reducing the pace of our buying as I look at the data, and I’m pretty optimistic about the economic outlook,” he said in a statement. a session modeled by Steve Liesman from CNBC. “We want more labor market growth and move towards our 2% inflation target, and I think that’s some way away before we declare that effect. “
As long as the Fed keeps its options open as the economy progresses throughout the year, Clarida said officials are committed to hitting and exceeding their inflation target, as well as earning full in- contagious.
Following the December meeting, the Fed pledged to continue the asset purchase program until significant progress is made toward the mandate. Earlier this week, Atlanta Fed President Raphael Bostic said he would not be surprised if the pace of bond purchases slows before the end of the year.
“Right now, I think maintaining the normal pace of buying through the rest of this year is expected,” Clarida said.