The Federal Reserve has clearly set the tapering path. Powell, in fact, has indicated that he is ready to take action, further strengthening the newly launched tapering program. As of today, the program envisages a $30 billion reduction in asset purchases per month, down from a total of $120 billion per month. Powell made hawkish remarks last week, asserting that it may be time to stop using the adjective “transitory” associated with the word “inflation”.
The data so far paints a particularly severe scenario on the dynamics of inflation. Since April 2021, in fact, price have soared steadily above 5%, reaching 6.2% in October. The figure published this afternoon recorded 6.8% in line with analysts’ forecasts. No surprises on the inflation report, as previously suggested by US President Biden, who pointed out that the November figure did not include the drop in the energy sector.
The market reaction saw the main U.S. indices turn into the green. The futures on the S&P500 showed an increase of more than half a point, while the NASDAQ extended towards the percentage point. In Europe, the main indexes turned positive after a red start to the session. Against this trend, the US dollar initially lost ground then bounced back.