The Federal Reserve could start dialling back its ultra-accommodative monetary stimulus by the end of the year, given the strength of the economic rebound, according to a top official at the US central bank.
In an interview with the Financial Times, Mary Daly, president of the San Francisco Fed, expressed confidence that the robust recovery in household and business activity from the depths of the Covid-19 collapse would continue to gather momentum as more people returned to the workforce and consumer spending remained buoyant, setting the stage for a policy pivot in the coming months.
“I remain very optimistic and positive about the fall and ongoing improvements in the key variables we care about,” she said on Wednesday. “That for me means it’s appropriate to start discussing dialling back the level of accommodation that we’re giving the economy on a regular basis, and the starting point for that is of course asset purchases.