About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

1 1 (December 16, 2021)

handle is hein.crs/goveezy0001 and id is 1 raw text is: Congressional *.Research Service Informing the Iegislative debate since 1914____________________ Federal Reserve: Tapering of Asset Purchases Updated December 16, 2021 In November, the Federal Reserve (Fed) announced that it would begin to taper its large-scale asset purchases, popularly known as quantitative easing (QE), by $15 billion per month (see Table 1). In light of the further increase in inflation, it announced in December that it would double the monthly reduction in purchases in January. If that pace is maintained, purchases would end in March 2022. Under tapering, the Fed will continue to purchase Treasury securities and agency mortgage-backed securities in a two-to-one ratio, and its balance sheet will continue to grow but more slowly. Table I. Fed Monthly Asset Purchases (billions) 2021-2022 Amount Decline from Previous Month Before Tapering $120 n/a After November Tapering Announcement November $105 $15 December $90 $15 After December Tapering Announcement: January $60 $30 If No Further Changes: February $30 $30 March $0 $30 Source: CRS. Tapering is the first step in the eventual normalization of monetary policy from the highly stimulative policies in response to COVID-19, which included asset purchases. Tapering itself withdraws some stimulus, and its pace is also likely to determine when the Fed begins raising interest rates. The Fed can raise the federal funds rate at any time, but Fed Chair Jerome Powell expects to wait until tapering has ended, consistent with past practices. If so, under current plans, the earliest increase in interest rates would be spring 2022. Congressional Research Service https://crsreports.congress.gov IN11792 CRS INSIGHT Prepared for Members and Committees of Congress -

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Already a HeinOnline Subscriber?

Log In

profiles profiles most