Federal Reserve says taper 'may soon be warranted'

• The Federal Reserve said Wednesday that it would consider tapering its asset-purchase plan as long as the economy continues to improve.
• The central bank has long stated that it would begin to remove its accommodative policy when "substantial further progress" was made toward achieving full employment.
• Following this week's regularly scheduled meeting of its policy-setting committee, the Fed issued a statement reporting that "the economy has made progress toward" its goals.
• However, it did not note that the economy had reached the "substantial further progress" benchmark it had previously targeted.
• At the same time, the central bank added a sentence to its policy statement pointing to a potential taper on the horizon.
• "If progress continues broadly as expected, the committee judges that a moderation in the pace of asset purchases may soon be warranted," the central bank said in its statement.
• On inflation, the Fed repeated its assessment that inflation remains "elevated," but policymakers continued to see the price increases as "largely reflecting transitory factors."
• Looking to the economy, the central bank maintained its belief that the prospects for growth continue to be reliant on what happens with COVID.
• "Progress on vaccinations will likely continue to reduce the effects of the public health crisis on the economy, but risks to the economic outlook remain," the Fed noted, duplicating language it has used in previous statements.
• The central bank added a note of caution not included in its previous communications, saying a "rise in COVID-19 cases has slowed" the recovery of the parts of the economy hardest hit by the virus.
• As to its current policy, the Federal Reserve left its key interest rates near zero, as expected.
• Specifically, the Fed kept the federal funds rate target range at 0.0%-0.25%.
• Even though it seemingly put tapering on the table, the central bank also maintained its asset-purchase program at its current rate.
• Purchases of at least $80B per month of Treasury securities and at least $40B per month of agency mortgage-backed securities will continue.
• The Fed's policy decisions came with a unanimous vote from members of the policy-setting committee.