The Federal Reserve signals multiple rate hikes are coming in 2022 as it moves to fight inflation
The central bank, which first announced in November that it was “tapering” its monthly asset purchases, said Wednesday that it will do so at a faster pace.
Starting in January, the Fed will buy $20 billion worth of Treasury securities less and $10 billion worth of mortgage-backed securities less. That leaves the monthly shopping list at $40 billion for Treasury securities and $20 billion for mortgage-backed securities.
This is consistent with what Federal Reserve Chairman Jerome Powell told Congress in late November.
“The Committee judges that similar reductions in the pace of net asset purchases will likely be appropriate each month, but it is prepared to adjust the pace of purchases if warranted by changes in the economic outlook,” Wednesday’s statement read.
The December policy meeting also included a summary of economic projections, the so-called “dot plot.”
Fed officials now predict the central bank’s benchmark interest rate to rise to 0.9% in 2022, up from the 0.3% expectation from September, signaling additional interest hikes.
This is a developing story. It will be updated
