FOMC meeting recap: Powell projects a November taper announcement

Fed Chairman Powell is clearly leaning toward a taper announcement at the central bank's next meeting in November...


As we noted in our FOMC preview report on Monday, the Federal Reserve was never likely to make any immediate changes to monetary policy at today’s meeting, and that was before fears of Chinese property developer Evergrande collapsing under the weight of its massive debt load reached critical mass this week.

So it certainly wasn’t a surprise that Jerome Powell and company left interest rates and asset purchases unchanged at today’s meeting, but we certainly did get an elusive taper “hint.” In it’s statement, the central bank noted that, “if progress continues broadly as expected, the Committee judges that a moderation in the pace of asset purchases may soon be warranted.”

In a phrasing even the notoriously opaque Alan Greenspan would admire, Jerome Powell and company managed to meet the market’s expectations with a nod toward normalizing monetary policy in the near future… without necessarily committing to starting the process at its next meeting in November.

(…at least, in the official statement – more below!)

Beyond that there were three other key aspects of the meeting for hints about how monetary policy will evolve from here:

1)      The monetary policy statement

Beyond the aforementioned taper hint, there was only one noteworthy tweak to the Fed’s monetary policy statement: The committee inserted a nod to the impact of COVID-19 cases slowing the recovery in certain sectors. Needless to say, this minor update was not a meaningful market mover.

2)      The summary of economic projections (SEP)

Thankfully, the accompanying update to the FOMC’s quarterly economic projections was a bit more interesting. The closely-scrutinized “dot plot” of interest rate projections showed an even split between Fed officials (9) who see interest rate liftoff in 2022 and those who see it later than that (9, with 8 of those projecting the first interest rate hike in 2023).

Separately, the median Fed official also increased his or her projection in the following ways:

  • Real GDP growth now projected lower in 2021, higher in 2022 and moderately higher in 2023
  • Unemployment now projected higher in 2021 and lower in both 2022 and 2023
  • Core PCE inflation now projected higher in 2021, 2022, and 2023

Source: FOMC Summary of Economic Projections

On balance, these tweaks point to expectations for a US economic recovery that is posied to play out over multiple years, rather than continuing at a breakneck pace for just 12-18 months.

3)      Chairman Jerome Powell’s press conference

Fed Chairman Powell is still speaking as we go to press, but the early highlights from his press conference clearly suggest that he’s leaning toward November taper announcement:


Reading between the lines, these comments suggest that Fed may have been within a vote or two of starting the taper process at this month’s meeting, a more hawkish development than many were anticipating.

See my colleague Joe Perry's upcoming report for analysis of how these developments are impacting markets!

How to trade with City Index

You can trade easily trade with City Index by using these four easy steps:

  1. Open an account, or log in if you’re already a customer 

    Open an account in the UK
    Open an account in Australia
    Open an account in Singapore

  2. Search for the company you want to trade in our award-winning platform 
  3. Choose your position and size, and your stop and limit levels 
  4. Place the trade

More from FED


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit for the complete Risk Disclosure Statement.