The economy and financial conditions are a captive of the pandemic risks.

The Fed exceeded expectations last week. They did increase the amount of the tapering of bond buying from the $15 billion monthly reduction already being executed by doubling it to $30 Billion a month starting in January. That was much more than we expected and shortened the time for the quantitative easing program to end. At the new pace, the Fed will be done with adding liquidity to the economy in March of 2022. Chairman Powell said they would not consider a change in managed rates until bond buying was over. That means the soonest we can expect a rise in the Fed Funds rate is April. The decision to begin to raise rates has not been made, but it is clear the Fed wants to move to a neutral policy position as inflation remains higher than the Fed had been expecting. Job growth remains very strong getting closer to full employment and demand levels continue to be strong.