Clarida says buying Fed bonds keeps pace with the rest of the year

Richard Clarida, vice chairman of the Federal Reserve, said he expects the central bank to maintain the pace of its asset purchases through the 2021 balance sheet.

“My economic outlook is in line with the fact that we are maintaining the current rate of purchases for the rest of this year,” he said during a presentation to the Council on Foreign Relations on Friday.

As things stand now, the Fed buys at least $ 120 billion a month, split between a minimum of $ 80 billion in Treasuries and $ 40 billion in mortgage deeds. The pace of purchases accelerated through the Covid-19 pandemic as a continuous effort to maintain economic growth and market functioning.

Markets have been wondering how long the Fed will continue the program, as its stake has now embezzled $ 7 trillion.

Clarida said Friday it sees no setback this year, though it expects growth to accelerate.

“I think it may take some time before we think about reducing the pace of our purchases as I look at the data, and I’m relatively optimistic about the economic outlook,” he added in a session led by Steve Liesman, CNBC. . “We want further progress in the labor market and we want to reach our 2% inflation target, and I think that is a few ways away before we declare victory over it.”

While the Fed will keep its options open as the economy progresses through the year, Clarida said officials are committed to achieving and likely exceeding their inflation target, as well as making full, inclusive employment.

After the December meeting, the Fed pledged to keep the asset buying program going until significant progress was made with the mandate. Earlier this week, Atlanta President Raphael Bostic said he would not be surprised if the rate of bond buying declined by the end of the year.

“I think it’s my expectation to maintain the current rate of purchases through the rest of this year,” Clarida said.