You might have been coming across this term called tapering lately. Do you know what it is?
As per the Brookings Institution, tapering is the gradual slowing of the pace of the Federal Reserve’s large-scale asset purchases.
The Fed used asset purchases to maintain economic stability when COVID-19 shut down the U.S. economy in 2020. Since June 2020, the Fed has been buying at least $120 billion in bonds each month.
During the September Fed Meeting, chair Jerome Powell said the November meeting could establish a tapering timeline. In the subsequently released FOMC minutes, the Fed noted that “gradual tapering” could begin as early as mid-November.
Watch the video above to know more.