The US Federal Reserve said that the US economy continues to strengthen despite the Delta variant of Covid. After the huge infection of the Delta variant of COVID-19, many policymakers thought that it will derail the recovery of the US economy. But fortunately, it was not the fact.
The central bank of the USA mentioned that overall indicators of economic activity“have continued to strengthen”. They also stated, “The sectors most adversely affected by the pandemic have improved in recent months, but the rise in Covid-19 cases has slowed their recovery. Inflation is elevated, largely reflecting transitory factors. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to US households and businesses.”
A portfolio manager at Fiera Capital Candice Bangsund said, “While the Federal Reserve has laid the groundwork for an eventual taper [of asset purchases] later this year, the Fed erred on the side of caution given that the macroeconomic landscape has deteriorated somewhat over the last few months.”
A macro strategist at Goldman Sachs Gurpreet Gill said, “Preconditions for a formal taper announcement will largely depend on economic conditions over the coming months, with an emphasis on data dependence.”
The central bank said the jobs market was improving and suggest reducing emergency support for the economy “soon”. However, they didn’t announce any formal date for pulling back support.