Chicago Fed Evans Says Tapering Could Start This Year

The U.S. Federal Reserve can begin winding down its bond-buying stimulus later this year as the economy improves, but will likely need to keep official interest rates near zero for another two years, Chicago Fed President Charles Evans said on Friday.

While Evans did not specify an exact month for the start of a reduction in the Fed's purchases of mortgage and Treasury bonds, his timeline appears to make him reticent about making such a move in September, as most investors now expect.

"I do expect, however, that the outlook will materialize in such a way that we'd likely reduce the (asset purchase) rate starting later this year and subsequently wind down these purchases over a couple of stages," Evans told an event sponsored by AgFirst Farm Credit Bank.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, he established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza