With economic recovery ongoing, there’s been much debate about if the Fed should pull back its financial support. Currently, the Federal Reserve is buying $120 billion in bonds per month. In recent days, officials have said that the central bank may taper bond purchases by the end of the year. At its current pace, the Fed would scoop up about $480 billion in assets between September and December. But officials are now debating if that level of support is necessary. The back and forth had caused gold and silver prices to rise.
CNN Business/Julia Horowitz
Does the US economy need another $480 billion in stimulus?
The Federal Reserve is buying $120 billion in bonds per month, part of a package of emergency measures to prop up the US economy during the pandemic. But as activity returns to normal, is that level of support necessary?
That’s among the key questions facing central bankers when they gather for an annual meeting in Jackson Hole, Wyoming this week.
What’s happening: The event, which usually includes central bankers from around the world, will be a pared-back affair due to the pandemic. Neither European Central Bank President Christine Lagarde nor Bank of England Governor Andrew Bailey will be in attendance.
That puts attention squarely on the Federal Reserve, which telegraphed last week that it could begin to taper its bond purchases by the end of the year.
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Delta variant, having put kibosh on Fed event, begins to menace recovery
The resurgence of the COVID-19 pandemic dealt its most visible blow yet as Federal Reserve officials abruptly canceled their premier in-person conference, raising questions about their insistence the economy faces limited risk from the Delta strain and plans to dial back crisis-era support.
The setback, announced late Friday, with the annual Jackson Hole, Wyoming, symposium now virtual for the second straight year, is the latest in a series of small but accumulating signs the new surge is having more of an impact than Fed officials anticipated. Chair Jerome Powell was already scheduled to deliver his keynote speech on Friday by webcast.
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Kitco News/Jim Wyckoff
Gold, silver see price gains as Federal Reserve confab looms
Gold and silver prices are higher in early morning trading Monday, as the key outside markets are favoring the precious metals bulls to start the trading week—a weaker U.S. dollar index and solidly higher crude oil prices.
The precious metals are also getting a bid early this week on growing ideas the Federal Reserve will not be able to start tightening its monetary policy as soon as many had reckoned just a few weeks ago. October gold futures were last up $10.00 at $1,791.80 and September Comex silver was last up $0.338 at $23.45 an ounce.
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