PLW - Fed Doves No Longer Rule The Roost

• The Federal Reserve left monetary policy unchanged, but there is a subtle yet significant change in the language that hints we are on the path toward a tapering of the Fed’s QE asset purchases.
• That’s not to say we are going to see an imminent taper. US employment levels remain more than 6 million lower than before the pandemic started, while the latest Delta Covid wave adds another level of uncertainty that will justify the wait-and-see stance.
• With supply side issues clashing against stimulus fuelled demand, we see inflation as a persistent issue with a growing prospect of a 2022 Fed rate hike.

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