These days, all the discussion in the financial markets has focused on when the Fed will start to scale back its bond purchases, but for all markets, including equity and debt exchange, what is more important is when the bond purchases will end.

Investors have made few major moves and are eagerly waiting for the Jackson Hole seminar to kick off on Thursday.On Friday, Federal Reserve Chairman Jerome Powell may provide clues about when and how the Fed will scale back its bond purchases. This will help determine the timetable for the Fed to raise interest rates.

The withdrawal of stimulus can be described as a boost, as a flood of liquidity in the financial system has pushed US stocks to record highs and Treasury yields remain just above a six-month low. In cases where Delta poses a new risk, reducing the size too quickly could derail the economic recovery and act too slowly or exacerbate inflationary pressures brought about by the restart of the economy.

Tom Essaye, a former Merrill Lynch trader, said, "the key point for the market is the speed with which the Fed withdraws its easing policy, as it determines how long it will take for the Fed to stop buying bonds completely, and then it will be the first time it will raise interest rates."

The Fed currently buys $80 billion of Treasuries and $40 billion of mortgage-backed securities a month, and the bank is expected to end its purchases of these assets before raising interest rates. The Fed has said it will keep its bond purchases unchanged until the economy makes substantial further progress towards full employment and price stability.

After the end of the last recession, it took the Fed 10 months to end its $85 billion-a-month bond-buying program. It was announced in December 2013 that it would end its bond purchases, which began the following month, with the Fed cutting its purchases by $10 billion at each policy meeting and distributing Treasuries and mortgage bonds equally. In October 2014, the Fed ended its entire bond-buying program and raised interest rates in December 2015 for the first time in seven years.

Essaye believes the Fed is most likely to start downsizing in December until it is fully completed by the end of 2022, which he says will help drive further gains in stocks and commodities and push 10-year yields towards 2 per cent.

Money market traders are currently predicting that the fed will raise interest rates for the first time in the first quarter of 2023, with the federal funds rate expected to peak around 1.4%.

"when the Fed announces code reduction, it may send a message about the speed of code reduction and the flexibility of the whole process," Morgan Stanley said.Guneet Dhingra, head of US interest rate strategy, said. "this could be a key sign of the rate hike cycle, especially in terms of the pace of rate hikes."

Yields on 10-year Treasuries have fallen steadily since March and are now around 1.3 per cent, not far from record lows on fears that the US epidemic could dampen the economic recovery. The gap between long-term and short-term Treasury yields has narrowed since hitting a more than five-year high in March, suggesting speculation that the Fed will begin to withdraw its stimulus measures. The dollar's spot index showed that the prospect of higher interest rates boosted the dollar, rising to its highest level since November this month.

Morgan Stanley predicts that the 10-year Treasury yield will close at 1.8% by the end of the year, and the Fed is expected to reduce its size from January to October. The company expects the Fed to raise interest rates for the first time in the second quarter of 2023.

Steven Barrow, head of monetary strategy at Standard Bank Gmur10, said the risk would be greater if the Fed delayed the reduction. Delaying the cut could force the Fed to raise interest rates just a few months after ending its bond purchases, a move that could disrupt financial markets and push safe-haven funds into assets such as the yen and the Swiss franc.

"it's dangerous for the Fed to do this because it needs to start talking about a possible rate hike from the middle of next year," Barrow said. And we know that it is not impossible for the Fed to raise interest rates sometime around the end of next year. So I am more concerned about the end of the Fed's reduction than the starting point. "

St. Louis Fed President James Bullard said he hopes to end bond purchases by the first quarter of 2022. Atlanta Fed President Raphael Bostic said the reduction should start after a few more strong jobs data, and faster than the previous ones.

The issue of underwriting is now particularly important because interest rates are close to zero, while US debt is at an all-time high and duration is close to record highs, all of which indicate that the bond market will be very sensitive if interest rates change. The risk has spread to the stock market and even technology stocks that have soared since the outbreak. The flood of low-interest funds around the world and low bond yields have triggered a chase for high-yielding assets, with almost all markets showing signs of a bubble.

George Goncalves, head of US macro strategy at Mitsubishi UFJ Securities Americas, said, "the impact of the writedown on peripheral assets will be greater than that of US Treasuries, starting with cryptocurrencies, including some stocks and high-yield bonds."