Market Commentary 09-03-21

New Release

Update on Fed Policy & Economic Data Update

Federal Reserve Provides Monetary Policy Update

The Federal Reserve held its annual Jackson Hole meeting on August 27th. Fed Chairman Jerome Powell’s speech made the case for the Fed to start reducing its monthly bond purchases, which were started during the pandemic to keep interest rates steady, increase bond market liquidity, and keep credit flowing. He said the Fed has made progress toward its goals of average inflation running above 2% and maximum employment in the U.S. labor market. While Powell laid the groundwork to start tapering (i.e., reducing) the Fed’s monthly bond purchases, he went to great lengths to make clear tapering is a separate decision from raising interest rates. He warned that raising interest rates to tamper inflation could disrupt the recovery and said the Covid-19 delta variant poses a risk to the economy.

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Wells Fargo Advisors Financial Network did not assist in the preparation of this report, and its accuracy and completeness are not guaranteed. The opinions expressed in this report are those of the author and are not necessarily those of Wells Fargo Advisors Financial Network or its affiliates. The material has been prepared or is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Additional information is available upon request. CAR-0921-00335

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