A decrease in activity by the Federal Reserve (Central Bank). Typically occurs once the economy is in the recovery stage and nearing a peak in the economic cycle. Some of the activities that the Federal Reserve may engage in while tapering include reducing its spending budget or adjusting the current interest rate. Usually only happens when the Fed feels confident about the economy's direction.

Use tapering in a sentence

The Federal Reserve is discussing tapering the stimulus package since the economy is showing signs of growth and improvement.

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taper taping rule