Ready to taper or waiting for more data? Recent Fed officials’ comments

September 28, 2021

(Reuters) -The Federal Reserve has said it will start to reduce its bond purchases as soon as November if the economy continues on its current track.

Some officials will watch the September jobs report, due Oct. 8, for a final bit of evidence that the labor market has achieved “substantial further progress” in its recovery. Others feel the benchmark has been met and are ready to start the process.

Following is a running tally of where officials have said they stand on the question since the Federal Open Market Committee’s Sept. 21-22 meeting. It will be updated as officials make their positions public.

READY TO ROLL ON TAPER:

LORETTA MESTER, PRESIDENT, CLEVELAND FED (non-voter in 2021/voter in 2022), Sept. 24:

“In my view, the economy has met those conditions, and I support starting to dial back our purchases in November and concluding them over the first half of next year.”

ESTHER GEORGE, PRESIDENT, KANSAS CITY FED (non-voter in 2021/voter in 2022), Sept 24:

“In my view, the criteria for substantial further progress have been met, with inflation running well above our target and the unemployment rate at 5.2%, down 1.5 percentage points relative to December. Under these conditions, the rationale for continuing to add to our asset holdings each month has waned, and signaling that we will soon consider bringing our asset purchases to an end is appropriate.”

JAMES BULLARD, PRESIDENT, ST. LOUIS FED (non-voter in 2021/voter in 2022), Sept 28:

“Substantial further progress has been met…We are in a good position now to begin pulling back on these purchases and get this finished in the first half of next year.” [L1N2QU0TG]

WAITING ON SEPTEMBER EMPLOYMENT REPORT:

LAEL BRAINARD, FED GOVERNOR (permanent voter), Sept 27:

“Employment is still a bit short of the mark on what I consider to be substantial further progress. But if progress continues as I hope, it may soon meet the mark.”

JOHN WILLIAMS, PRESIDENT, NEW YORK FED (permanent voter), Sept 27:

“I think it’s clear that we have made substantial further progress on achieving our inflation goal. There has also been very good progress toward maximum employment. Assuming the economy continues to improve as I anticipate, a moderation in the pace of asset purchases may soon be warranted.”

CHARLES EVANS, PRESIDENT, CHICAGO FED (voter in 2021), Sept. 27:

“I see the economy as being close to meeting the ‘substantial further progress’ standard we laid out last December as the bar for beginning to taper our asset purchases. If the flow of employment improvements continues, it seems likely that those conditions will be met soon and tapering can commence.”

NEEL KASHKARI, PRESIDENT, MINNEAPOLIS FED (voter in 2023), Sept. 24

“The recovery is more underway so to speak, and so I think that taper that the Chair signaled is appropriate for the economic environment we expect to be in for the remainder of this year and for next year,” he told MNI Market News in an interview. “I do think we would see the beginning of a taper later this year.”

(Compiled by the U.S. economics team, Editing by William Maclean, Andrea Ricci, Aurora Ellis, and David Gregorio)

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