Powell Prepares Markets For Bond Tapering

August 30, 2021

By Ino.com

Stocks rose on Friday posting a winning week as Fed Chair Jerome Powell prepared the markets for the central bank to pull back on some of its monetary stimulus, saying it’s likely to start tapering its $120 billion in monthly bond purchases this year.

The DOW gained 241.69 points or +0.69%, to 35,454.81. The S&P 500 rose +0.88% to hit a new intraday high and closed at 4,509.37, and the NASDAQ added +1.23%, also hitting a new record during the session, closing at 15,129.50.

The three major indexes closed out the week in the green with the DOW finishing up +0.96%, while the S&P 500 added +1.52% and the NASDAQ gained +2.82%.

The 10-year Treasury yield, which ran up this week into the Powell speech, eased slightly after the Fed Chair’s remarks as he made clear that interest rate hikes would not immediately follow after tapering was over.

Options Class is In Session - Learn More

“The timing and pace of the coming reduction in asset purchases will not be intended to carry a direct signal regarding the timing of interest rate liftoff, for which we have articulated a different and substantially more stringent test,” Powell said.


Free Reports:

Top 5 Companies Added to Our Stock Watch List this Quarter - Here are the Stock Symbols that stood out so far in the fourth quarter of 2021.





Get our Weekly Commitment of Traders Reports - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.





Powell also said inflation is solidly around the central bank’s 2% target rate, one of the goals of the Fed’s dual mandate. It has “much ground to cover” to reach its other goal of maximum employment, however, though there has “been clear progress” toward it, Powell added. The Fed has used the term “substantial further progress” as a benchmark for when it will start tightening policy.

Based on statements from other Fed officials, a tapering announcement could come as soon as the Fed’s Sept. 21-22 meeting.

Key Levels To Watch Next Week:

Every Success,
Jeremy Lutz
INO.com and MarketClub.com

By Ino.com – See our Trader Blog, INO TV Free & Market Analysis Alerts

Source: Powell Prepares Markets For Bond Tapering