Monthly Outlook - September 2021

As the economic recovery materializes, demand for semiconductors increases. The U.S. Federal Reserve indicated that it may soon begin tapering its asset purchase program, but FOMC (Federal Open Market Committee) members assured investors that the process will be "gradual".

The Federal Reserve's decision on tapering its stimulus program is separate from the decision on when to raise interest rates. The November FOMC meeting will provide clarity on the new economic policy.

Energy market prices have increased again. The major indices have seen their record performance slow down. Commodities remain attractive.

Macro Corner

Following the FOMC meeting, Federal Reserve Chairman Jerome Powell announced that the tapering of bond purchases will be postponed. Which is one of its main emergency measures to combat the effects of the pandemic. However, the official statement said: "If progress continues broadly as expected, the Committee believes that a moderation in the pace of asset purchases would soon be warranted. 

The official announcement is expected to be made in the coming weeks. The November third FOMC meeting could be an important date for changes to current policy to begin.

FOMC members were reluctant to indicate when the current asset purchases will end. However, Powell indicated that the committee is inclined to reach the final stage around the middle of next year. Moreover, the Fed Chairman was consistent in indicating that this decision on tapering purchases is separate from the decision on when interest rate hikes would begin.

It seems that opinion among members is divided between some who prefer to raise interest rates in 2022 and those who consider that it would not yet be appropriate.