EUR/USD has been edging lower amid signs the Fed is inching toward buying fewer bonds. Time to tumble? Yohay Elam, an Analyst at FXStreet, believes so.
Three signs Fed is tiptoeing toward tapering
“Time to ‘think about brooding about tapering’ – Philadelphia Fed President Patrick Harker has paraphrased Chair Jerome Powell’s previous comments on refraining from a rate hike. Harker’s comments function the primary hint that the bank is moving toward tightening, supporting the dollar.”
“The Fed announced that pandemic-era bond and ETF program will wind down. the entire of both portfolios may be a minuscule $13.6 billion, but what the Fed buys during a week under its broader bond-buying scheme. Nevertheless, this baby step is another hint toward a bigger move.”
“The Federal Reserve’s Beige Book pointed to growing price pressures. This document includes anecdotal evidence from the bank’s contact across the country and is published toward its all-important rate decision. If the Fed has this new information on its desk, perhaps it could signal fewer bond buys in fortnight .”