Fed official signals economy is strong enough for taper launch

A senior official of the Federal Reserve, John Williams, signalled the US economy is strong enough for the central bank to consider reducing the massive recovery-related bond-buying program soon, but he urged the adoption of sufficiently patient approach to raising interest rates.
Williams, the president of the New York Fed, acknowledged the improving economic outlook and set the stage for the Fed to scale back its USD 120 billion-a-month asset purchase program this year.
Williams stressed that the conditions necessary for the Fed to eventually adjust its major policy rate include a long way off from being met.
“The headline of our economic story is good news: the recovery continues to show solid momentum. But the subheading is that we’ll need to be patient,” Williams said at an event hosted by the Economic Club of New York on Monday.
“Even with the strong pace of growth we experienced much of this year, a full recovery from the pandemic will take time to complete.” Added Williams, who sees the economy expanding between 5.5 to 6 per cent this year.
Williams said a move to reduce the central bank’s asset purchase program may “soon be warranted”, echoing the message concluded from Fed chair Jay Powell’s messages last week.