The U.S. labor market hasn’t seen the ‘substantial’ progress that is necessary before the Federal Reserve can begin to slow down its massive monthly bond purchases, New York Fed President John Williams said Wednesday.

“There has also been very good progress toward maximum employment, but I will want to see more improvement before I am ready to declare the test of substantial further progress being met,” Williams said, in a video address to students at St. Lawrence University.

Assuming the economy continues to improve as I anticipate, it could be appropriate to start reducing the pace of asset purchases this year, he said.

Williams’s stance suggests he will not support any formal announcement of a tapering of the bond purchases at the Fed’s next policy meeting in two weeks.

Many Fed officials would like the Fed to announce it is ready to start tapering this month. Williams’ stance is important because he is seen as a close confident of Fed Chairman Jerome Powell. It suggests the Fed leadership wants to wait until the next Fed meeting in early November to take any meaningful first step toward tapering.

Since June 2020, the Fed is buying $80 billion of Treasurys and $40 billion of mortgage-backed securities each month to hold down long-term interest rates and support demand.

With the economy growing strongly over the last few quarters, and inflation spiking as the economy reopened, many analysts and Fed officials said it was time for the Fed to slowly pull back its support for the economy.

The weak August jobs report was seen as evidence that would support Fed officials who did not want the Fed to announce a tapering plan at its meeting on Sept. 21-22.

St. Louis Fed President James Bullard said earlier Wednesday that he expects the taper will get going this year.

Many economists say there is not much difference between the Fed starting to taper in October or December.

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were lower on Wednesday after Bullard’s comments were reported.

In his speech, Williams said he expected inflation to slow down to a 2% rate next year.

He said the delta coronavirus variant is weighing on consumer spending and job growth.

The New York Fed president said there is “a long way to go” before the central bank will meet a separate test to begin to raise short-term interest rates.

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