Clarida says Fed bond purchases will keep pace with the rest of the year

Federal Reserve Vice President Richard Clarida said he expects the central bank to keep pace with its asset purchases during the 2021 balance.

“My economic outlook is consistent with maintaining the current pace of purchases for the rest of this year,” he told the Foreign Affairs Council during a presentation on Friday.

As things stand, the Fed buys at least $ 120 billion a month, spread between a minimum of $ 80 billion in treasury and $ 40 billion in mortgage-backed securities. The pace of purchases has accelerated through the Covid-19 pandemic as a continued effort to maintain economic growth and the functioning of the market.

Markets are wondering how long the Fed will keep the program, as its stakes have now exceeded $ 7 trillion.

Clarida said Friday that she sees no setback at any point this year, though she expects growth to accelerate.

“I think it could be quite some time before I think about slowing down our purchases the way I look at the data and I’m relatively optimistic about the economic outlook,” he added in a session moderated by CNBC’s Steve Liesman. “We want to move further into the labor market and move towards our 2% inflation target, and I think it’s a long way off before declaring victory.”

While the Fed will keep its options open as the economy progresses year-round, Clarida said officials are committed to achieving and likely exceeding their inflation target as well as achieving employment. full and inclusive.

After the December meeting, the Fed pledged to maintain the asset purchase program until they had made substantial progress toward the mandate. Earlier this week, Atlanta Fed Chairman Raphael Bostic said he wouldn’t be surprised if the pace of bond buying slows by the end of the year.

“Right now, I think keeping the current pace of shopping for the rest of this year is my expectation,” Clarida said.