When Will Tapering Begin?

Fed Governor and possible next Fed Chair, Lael Brainard, said on July 30th that she agreed with Chairman Powell in saying that employment has some distance to go before the Fed believes this “mandate” has been reached. She said she also wants to see September data on jobs, inflation, etc to assess where our economy is at then. Of course, this data is released in October and the Fed’s next meeting would be November 3rd. Thus, November 3rd may be the earliest date that the Fed may announce a reduction in their purchases of Treasuries and mortgage bonds.

Fed Governor and a voting member Chris Waller said on August 3rd that he would be ready to announce tapering in October if the July and August Jobs Reports showed a combined 2 million new jobs created as that would fulfill the “substantial progress” that the Fed wants to see. He also believes that tapering should be early and fast so that the Fed can raise short-term rates next year if needed.

We have now seen job growth of 2.4 million over the last 3 months. Does that quantify as “substantial progress” at the Fed? Or will they wait even longer? The 2 “loudest” voices at the Fed, Powell and Brainard, are certainly in the camp of waiting longer.
Thus, tapering may not begin until 2022.