Richard Clarida
Scott Mlyn | CNBC
Federal Reserve Vice Chairman Richard Clarida said he expects the central bank to maintain the pace of its asset purchases over the course of the 2021 balance sheet.
“My economic outlook is consistent with the fact that we will maintain the current pace of purchases for the rest of this year,” he told the Council on Foreign Relations during a presentation on Friday.
As things stand, the Fed is buying at least $ 120 billion a month, spread over at least $ 80 billion in Treasury bills and $ 40 billion in mortgage-backed securities. The pace of purchases has been accelerated by the Covid-19 pandemic as an ongoing effort to maintain both economic growth and market forces.
Markets wondered how long the Fed will keep the program going as its positions have now overshadowed $ 7 trillion.
Clarida said on Friday he does not see a downturn this year, although he expects growth to accelerate.
“I think it may be a while before we think about slowing down the pace of our purchases the way I look at the data, and I’m relatively optimistic about the economic outlook,” he added during a session led by CNBC’s Steve Liesman. . “We want to make further progress in the job market and on our way to our 2% inflation target, and I think that’s a long way off before we declare victory on that.”
While the Fed will keep its options open as the economy progresses throughout the year, Clarida said officials are determined to meet and likely exceed their inflation target, as well as full, inclusive employment.
Following the December meeting, the Fed committed to maintain the asset purchase program until substantial progress has been made towards the mandate. Earlier this week, Raphael Bostic, president of the Atlanta Fed, said he wouldn’t be surprised if the pace of bond buying slows down towards the end of the year.
“At this point, I think my expectation is to maintain the current pace of purchases for the rest of this year,” said Clarida.