Bank of America Global Research discusses its expectations for the Fed policy trajectory.
"We change our base case for taper to start in Nov '21 vs. prior of Jan '22 with per meeting adjustments. We continue to expect UST & MBS will be tapered proportionally and conclude in Q3 2022. Focus is on employment data to meet "substantial further progress" goal," BofA notes.
"November appears the most likely time to start taper due to the Fed calendar and operational considerations. The Fed has 3 meetings left in 2021: September 22, November 3 and December 15. September seems too early to start a taper since the minutes signaled FOMC agreement on providing "advance notice" before making changes to balance sheet policy and may be too early to get a proper read on employment data since delta variant concerns emerged," BofA adds.