Richard Clarida
Scott Mlyn | CNBC
Federal Reserve Vice President Richard Clarida said he expected the central bank to keep pace with its asset purchases until the 2021 balance.
“My economic outlook is consistent with maintaining the current pace of purchases over the remainder of this year,” he told the Council on Foreign Relations during a presentation on Friday.
As it stands, the Fed is buying at least $ 120 billion a month, split between a minimum of $ 80 billion in Treasury bills and $ 40 billion in mortgage-backed securities. The pace of purchases accelerated during the Covid-19 pandemic as an ongoing effort to maintain economic growth and the functioning of the market.
Markets have been wondering how long the Fed will keep the program going, as its investments have already exceeded $ 7 trillion.
Clarida said on Friday that she does not see a downturn at any time this year, although she expects growth to accelerate.
“I think it may take some time before we think about slowing down our purchases the way I see the data, and I’m relatively optimistic about the economic outlook,” he added in a session moderated by Steve Liesman of CNBC. “We want more progress in the job market and to move towards our 2% inflation target, and I think there is still a little bit to go before we declare victory over it.”
Although the Fed keeps its options open as the economy moves forward over the year, Clarida said officials are committed to reaching and likely exceeding their inflation target, as well as full and inclusive jobs.
After the December meeting, the Fed pledged to maintain the asset purchase program until substantial progress has been made towards the mandate. Earlier this week, Atlanta Fed President Raphael Bostic said he would not be surprised if the pace of bond buying slows down by the end of the year.
“At the moment, I think that maintaining the current pace of purchases throughout the rest of this year is my expectation,” said Clarida.