Fed to meet on tapering asset purchases

The US Federal Reserve will start its two-day policy meeting on Tuesday, with all eyes on how the central bank intends to begin paring down its asset purchases.

Policymakers are expected to discuss a gradual reduction in emergency asset purchases, which the central bank began in March last year in response to the coronavirus pandemic.

Fed Chair Jerome Powell said last month that, if the economy evolved broadly as anticipated, it could be appropriate to start reducing the pace of asset purchases this year.

The US economy has been on a recovery path, but concerns are growing about an increase in infections with the more transmissible Delta variant of the coronavirus.
Policymakers are expected to take into account the effect on the labor market in deciding when and how to start tapering.

Fed policymakers will also present their projections on when to raise interest rates from the current near-zero level.