Fed likely to open bond-buying 'taper' door, but hedge on outlook

The Fed is due to release its latest policy statement and economic projections at 2 p.m. EDT (1800 GMT), with Fed Chair Jerome Powell holding a news conference half an hour later to discuss the outcome.

WASHINGTON: The Federal Reserve is expected to clear the way on Wednesday for reductions to its monthly asset purchases later this year and show in updated projections whether higher-than-expected inflation or a resurgent coronavirus pandemic is weighing more on the economic outlook.

Fed policymakers, who are wrapping up their latest two-day meeting, have been handed a conflicting set of developments since late July - signs of a slowdown in the service sector, a COVID-19 surge that has eclipsed that of last summer and weak job growth in August, all alongside still strong inflation - and been conflicted among themselves about how to react.