The Fed is getting ready to raise interest rates
“With inflation well above 2% and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate,” the Fed statement read.
Prices continued to climb into the end of 2021 and economists expect to see the peak of this inflation cycle in the early months of this year.
“Like most forecasters we continue to expect inflation to decline over the course of the year,” said Fed Chairman Jerome Powell during Wednesday’s press conference. Less pressure on the battered global supply chains and less stimulus from Washington, should help with that.
The central bank slashed rates to near zero in March 2020 when the pandemic put the US economy into a choke hold.
But there’s not much sense in trying to guess when these rate hikes will happen, Powell told reporters Wednesday.
“It is not possible to predict with much confidence exactly what path for our policy rate is going to prove appropriate,” he said.
The bank will continue reducing its monthly asset purchases and end them in early March, it said Wednesday.
This is a developing story. It will be updated
