The Federal Reserve building in Washington, DC, the US, July 23 2021. Picture: STEFANI REYNOLDS/BLOOMBERG
Pressure on Fed chair Jerome Powell to begin scaling back bond buying sooner rather than later has probably eased amid concern that spread of the coronavirus Delta variant could sap the economic recovery. Unprecedented cash payments by the US government to households, record low mortgage rates and changing consumer preferences have conspired to fuel a boom in housing. The S&P CoreLogic Case-Shiller US national home price index rose 14.6% in the 12 months to April, according to the latest available numbers, marking the fastest pace of increase on record in data from 1988.
Fed watchers are about evenly split on which path policymakers will choose, with slightly more than half expecting them to taper MBS purchases faster, according to results of a Bloomberg survey conducted between July 16 and July 21.