The FED is tapering!!, What foes that mean???

Tapering? What does this mean?

The FOMC is “Tapering”, but they are keeping the Fed Funds Rate the same??Tapering vs Rates what does this mean? Tapering is the Fed taking liquidity out of the Market.?It looks like the Fed is finally acknowledging the current inflation is not “transitory” and is going to be a longer-term issue that needs to be addressed. “The supply and demand imbalances and the rising cost of energy contribute to the elevated levels of inflation.”?The FOMC Announcement Wednesday included increased concern from the Fed and measures the Fed will take to combat the rising inflation we are experiencing.??The Fed remains concerned about the COVID-19 Pandemic “The path of the economy continues to depend on the course of the virus. Progress on vaccinations and an easing of supply constraints are expected to support continued gains in economic activity and employment as well as a reduction in inflation. Risks to the economic outlook”, but the increasing inflation concerns are now requiring action. While the FOMC decided to keep the target range for the Fed Funds Rate at 0 to ?%, this is not the only factor impacting Interest Rates.

?The Fed has been pumping massive amounts of liquidity into the Market through asset purchases. This liquidity has been a major factor in the historically low interest rates we have enjoyed over the past two-years.?The FOMC Announcement stated the Fed was going to accelerate the pace of “Tapering” doubling the reduction of the asset purchases. This means less liquidity in the Market, which will put upward pressure on Interest Rates! So, the Fed Funds Target Rate is still 0 to ?%, but Rates are getting worse? Yes! Liquidity matters. The Fed taking so much liquidity out of the Market has more of an impact then the Fed Funds Target Rate remaining at 0.?So, you can have 0% and Rates can get worse.?

?If you are looking to buy now is the time.?

?Rates are not moving in our favor.

?One factor can reverse this trend.

?Rising cases of Omicron and looming shutdowns can change the Fed’s strategy, but right now we are headed Up! Up! Up!?

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