Corporate Finance on the Tapering and Fixed-Income

The Federal Reserve (FED) banking system has announced that it will decrease and eventually end the monthly $120 billion bond-buying program. Tapering will start this November. The FED announced they will reduce the bond-buying by $15 billion every month, concluding in June 2022.

The FED was buying government-backed bonds since the start of the pandemic. They added more than $4 trillion to their balance sheet, as an emergency response to Covid-19.

Tightening monetary policies started worldwide; the Bank of Canada and Reserve Bank of Australia have begun to act hawkish either.

Jay Powell also added that they are ready to act as the economy moves, either to ‘’speed up or slow down’’. The FED Committee also added they are "prepared to adjust the pace" of tapering.

Wall Street...

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