Commenting on the Federal Open Market Committee statement, Melanie Baker, Senior Economist at Royal London Asset Management said:
“Asset purchase tapering looks set to start by the end of the year, but the US is still some time away from a rate rise. While Chair Powell indicated he thought the test for a taper was “all but met”, the test for a rate rise is tougher.
“Covid has set back the recovery a bit over the summer but fundamentals supporting US growth are still strong – especially assuming the promised fiscal bills are passed in the next month or so. The US should move closer to its maximum employment goal over the next 12 months, leaving a rate rise very much a live possibility for the second half of next year.”
The views expressed are those of the author at the date of publication unless otherwise indicated, which are subject to change, and is not investment advice.