In its latest preview for Wednesday’s key Federal Open Market Committee (FOMC) meeting, Goldman Sachs says, “The Fed needs to see substantial further progress on employment and inflation to conclude that tapering is appropriate, which is unlikely to happen until the second half of 2021.”
The report also states that the US central bank may want to give ample warning before the first taper, likely in Q4 2021 or Q1 2022.
“The FOMC’s tolerance for any future tightening in financial conditions might be somewhat greater than usual at a time when activity is picking up and powerful growth impulses from reopening, fiscal stimulus, and pent-up savings are set to support the economy all year,” per the preview piece.
Read: Federal Reserve Preview: The Good, the Bad and the Ugly edition, three critical things to watch