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Fed won’t change its policy in 2021. What do analysts say?

The Federal Reserve plans to remain on hold for the rest of 2021 even though Wall Street thinks that policymakers should reduce the stimulus they’re providing to the U.S. economy.

According to the latest survey, the agency won’t decrease its $120 billion of asset purchases until January. The forecasts say the first rate hike won’t come until December 2022, as well.

John Ryding, the chief economic advisor at Brean Capital, stated that it is appropriate for the Federal Reserve not to comment on fiscal policy. Furthermore, it is entirely appropriate for monetary policy to take substantial fiscal policy shifts into account while calibrating the stance of monetary policy. However, the agency is not doing this. It seems the monetary policy is set to be too easy for too long.

Peter Boockvar is the chief investment officer at Bleakley Advisory Group. According to him, pressure on the Federal Reserve to start tapering QE would only intensify in the coming months.

Fed Chairman Jerome Powell and the agency managed to convince markets that the Fed will remain on hold despite growing economic optimism and concerns about inflation.

According to reports, the U.S. economy will likely grow more than 6.5% this year, while the unemployment rate will probably decline to 4.9%, and inflation will soar to 2.5%.

India’s economy may shrink this quarter due to rising coronavirus cases 

India’s economy may contract in the current quarter as coronavirus cases surge. However, economists hope that the country will recover in the next one.

India reported another 323,144 coronavirus cases on Tuesday, bringing the country’s total number of infections to more than 17.6 million.

The country is going to see a sequential growth hit in its first quarter. This is according to Sonal Varma, India’s chief economist at Nomura. India’s fiscal year begins in April, and it ends in March the following year. Varma added that gross domestic product would likely shrink around 1.5% in the current quarter. There is also a downside risk to this estimate, though.

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