This week, central bankers from around the globe will hold meetings and give updates on various policies, from rate setting to bond buying programs. In the U.S., the attention will be on the Federal Reserve (Fed) for further information on its future plans for scaling back its bond purchase program, as well as the thoughts of Fed governors on the future path of interest rates. I expect the Fed will still signal that the conditions for tapering its bond purchases or raising interest rates haven’t been met, but that the economy continues to improve despite the uncertainty caused by the lingering pandemic.
The Bank of England meeting will be particularly interesting, because at its last meeting, the then eight-member committee was tied on whether the conditions had been met for tightening policy. Overall, I’m not expecting any significant surprises, but markets will be looking for any hawkish tone since monetary accommodation has helped push asset prices higher across the globe.
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