Fed's Bostic sees no taper at September meeting

The US Federal Reserve is unlikely to taper its bond-buying programme at its September meeting but action could come later this year, a hawkish member of the central bank's monetary policy committee said.

Federal Reserve Bank of Atlanta President Raphael Bostic said the Fed would be able to pull back on its asset buying campaign this year but that a move was not on the cards at the next meeting.

Bostic has called for the Fed to pare its purchases of $120bn a month in Treasury and mortgage bonds in the past few months, hardening his position. He told the Wall Street Journal recent data and the resurgence of the coronavirus pandemic suggest more time is needed before stimulus for the economy is reduced.

"The weaker data that we've seen more recently suggests to me that maybe there's a chance for some play on this, but I still think that sometime this year is going to be appropriate," Bostic told the Journal. "I wouldn't lean in too heavily to expecting anything on taper at the next meeting," he added.

Fed officials are split over when to reduce the purchases and whether taming inflation or supporting the economy against unemployment and further disruption by Covid-19 should be priorities. Non-farm payrolls fell far more than expected in August, raising concerns about the durability of the economic revival.