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Fed Chair Jerome Powell during a congressional hearing last year. Photo: Stefani Reynolds/Bloomberg via Getty Images

The Federal Reserve hinted Wednesday its full throttle of economic support could start to ease as soon as November (its next policy meeting).

Why it matters: It would be the start of a pivot for the Fed, which unleashed unprecedented measures when the pandemic hit to help rescue the U.S. economy.

The big picture: COVID-19 is still pressuring the economy and labor market. In its first economic projections that reflect the delta variant impact, the Fed downgraded near-term economic expectations.

  • It now expects the economy will grow 5.9% this year — a rapid pace, but slower than the 7% estimated in June. (Growth estimates for next year though jumped by 0.5 percentage points).

What's new: The Fed sent its strongest signal yet that it will slow the monthly bond purchases that have supported the economy and buoyed the stock market.

  • That's reflected in a statement that's parsed word-by-word by market-watchers. It now says a pullback of those emergency measures "may soon be warranted."

Flashback: For months, the Fed has said it would need to see "substantial further progress" on employment and inflation to dial those purchases back.

  • That test has been "all but met," Fed chairman Jerome Powell told reporters on Wednesday, and incoming economic data doesn't have to be out-of-this-world great to confirm that.
  • He also said this type of support is much less useful now "as a tool than ... at the very beginning [of the pandemic crisis]."

What to watch: Nine Fed officials (half of the committee) expect interest rates will rise from rock-bottom levels next year — up from the seven who said so in June.

Go deeper

Changing the inflation conversation

Illustration: Annelise Capossela/Axios

Inflation looks like it’ll run hot for longer than plenty of smart people thought it would. The conversation over just how much more Americans will have to pay for their stuff has taken on a new intensity, as supply problems show few signs of fading.

Why it matters: The rate of price growth has remained consistently strong in recent months — a time that some thought would bring cooling prices after an initial reopening spike. What goes on with prices will influence the decisions made by Congress, the Biden Administration, and the Federal Reserve.

Manchin, Schumer huddle with Biden in Delaware to discuss spending bill

Senate Majority Leader Chuck Schumer (L) and Sen. Joe Manchin (R) at the U.S. Capitol on Nov. 13, 2014. Photo: Win McNamee/Getty Images

Sen. Joe Manchin (D-W.Va.) will meet with President Biden and Senate Majority Leader Charles Schumer (D-N.Y.) on Sunday morning in Delaware as Democrats look to reach an agreement on the massive spending measure.

Driving the news: Democrats are still negotiating what to keep in the bill and how to pay for it, with Biden saying on Thursday that the party does not have the votes to raise the corporate tax rate.

2 hours ago - Technology

Scoop: Facebook exec warns of "more bad headlines"

Illustration: Megan Robinson/Axios

In a post to staffers Saturday obtained by Axios, Facebook VP of global affairs Nick Clegg warned the company that worse coverage could be on the way: “We need to steel ourselves for more bad headlines in the coming days, I’m afraid.”

Catch up quick: Roughly two dozen news outlets had agreed to hold stories based on leaked materials from Facebook whistleblower Frances Haugen for Monday publication — but the embargo fell apart Friday night as participating newsrooms posted a batch of articles ahead of the weekend.

You’ve caught up. Now what?

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