The Federal Reserve is expected to turn the corner on its COVID-era policies on Wednesday afternoon.
Markets and Fed watchers are expecting Federal Open Market Committee to announce a plan to scale back its $120 billion-a month pace of asset purchases. The central bank has been directly buying U.S. Treasuries and agency mortgage-backed securities to signal its support of the economy under the quantitative easing program.
There are concerns about rising inflation, which is one of the reasons for the slowdown. The Fed would be able to position itself to raise interest rates at some later date to sell it's earnings, and that would allow it to sell it's worth it to get rid of rising price pressures.
The Federal Reserve has emphasized the need to close the jobs shortfall of 5 million workers compared to pre-pandemic levels, but policymakers have insisted that near- zero interest rates should still support employment as it tapers.
I do think it's time to taper, and I don't think it's time to raise rates, said Federal Reserve Chairman Jerome Powell on October 22.
Powell could field questions about whether or not the Fed's taper plans are related to future interest rate hikes. Powell is likely to face questions regarding the central bank's ongoing trading scandal, as well as Powell's own updates on whether or not he's in consideration for another term as Fed chairman.
Brian Cheung, a reporter for Yahoo Finance, is expected to release its policy statement at 2 p.m. It's possible to follow him on Twitter bcheungz.