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A top Federal Reserve official has warned that the US central bank’s emergency bond-buying programme is ill-suited for an economy held back by supply constraints, urging instead a speedy end to the stimulus to avoid burdensome debts and inflationary pressures.
Eric Rosengren, president of the Boston Fed, told the Financial Times that he would support the central bank announcing next month that it would begin to wind down or “taper” its $120bn in monthly asset purchases this autumn and get on track to halt them by the middle of 2022.
The purchases of Treasuries and agency mortgage-backed securities were no longer the right remedy in an environment of severe shortages of essential materials and workers, Rosengren said. The current situation was different from the aftermath of the 2008 global financial…