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MKM’s Darda Sees Powell Using Jackson Hole to Hint at Taper

  • Consensus moving to Fed reducing bond purchases this year
  • Decision depends on labor market continuing to show strength
Jerome Powell, chairman of the U.S. Federal Reserve.

Jerome Powell, chairman of the U.S. Federal Reserve.

Photographer: Al Drago/Bloomberg

Financial markets may receive a welcome signal from Federal Reserve Chairman Jerome Powell this week, one that could keep stocks on course and credit markets steady.

“Powell is going to try not to make big waves,” Michael Darda, chief economist and market strategist at MKM Partners, said in a Bloomberg TV Surveillance interview Monday. “The center of intellectual gravity on the Fed is definitely moving toward announcing a taper this year, probably commencing the taper before year end, provided the labor market holds up. I think what Powell will hint at is what we already know, that a taper will be announced likely this fall.”