The United States Federal Reserve (Fed) is faced with continued challenges as it seeks to manage both the cyclical and structural economic fallout from the pandemic and move beyond its ultra-accommodative policies. Fed Chair Jerome Powell indicated at the most recent Federal Open Market Committee (FOMC) meeting a desire to shift away from the central bank's bond purchases by the middle of 2022, suggesting an end to quantitative easing in the near future. For investors, the shift toward policy normalization indicates a slightly more challenging environment ahead and therefore a need for more selective portfolio allocation.
