(Bloomberg) -- Financial markets “are very well prepared” for the Federal Reserve to start tapering its massive asset-purchase program in the fall, St. Louis Fed President James Bullard said.
“They’ve been expecting it. They don’t really think asset purchases are that effective in this environment,” he said in an online event on Friday. Markets “are very much ready” for the taper to “go ahead this fall,” Bullard said, adding that he would want to see it end by the “first quarter of next year.”
Bullard’s timetable is considerably faster than has been suggested by other Fed officials or the plan expected by economists. In a survey prior to this week’s policy meeting, economists expected the committee would announce a tapering formally by December and start the taper in early 2022.
Since last September, the Fed has set the amount of its monthly purchases of Treasuries at $80 billion and mortgage-backed securities at $40 billion to help the economy heal from Covid-19.
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