Federal Reserve a ‘long way’ from reducing stimulus

Following a two-day meeting, Federal Reserve chair Jay Powell remained clear that the US Central Bank was not ready to discuss tapering their vast economic support, even after raising its expectations of the economic recovery. The Fed left its record low near-zero benchmark interest rate unchanged and pledged to continue $120 billion of asset purchases as it once again labelled growing inflation fears as largely ‘transitory’. The hard stance reflects a high bar for alterations in approach, signalling to investors unsustained bouts of inflation would be tolerated. The Nasdaq and S&P 500 ended the day 0.3 and 0.2% higher, respectively.