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Kurtis Garbutt
The Federal Reserve announced it was accelerating the scale back of its asset-buying program, from $15 billion to $30 billion a month from January, "in light of inflation and improving labor market conditions," the authority said in a filing.
The Fed also raised the inflation forecast for 2021 to 5.3% from 4.2%, lowered the GDP growth forecast to 5.5% from 5.9% for this year. In 2022, the Fed expects inflation at 2.6% and GDP dynamics at 4%.
All 18 members of the Fed's Open Market Committee voted for a rate hike as early as 2022. 10 of them expect three rate hikes next year.
Bloomberg wrote ahead of the meeting that it could see a "historic turnaround in monetary policy" for the US central bank and the biggest shift in terms of rate hike projections.
The Fed's rate range has been kept close to zero since March 2020. In March last year, the authority urgently cut rates twice to support the economy during the coronavirus pandemic: first from 1.5-1.75% to 1-1.25% (marking the first unplanned rate cut since the 2008 crisis, The Wall Street Journal wrote) and then to 0-0.25%. Rates have remained at this low level ever since.
source: bloomberg.com, wsj.com
The Fed also raised the inflation forecast for 2021 to 5.3% from 4.2%, lowered the GDP growth forecast to 5.5% from 5.9% for this year. In 2022, the Fed expects inflation at 2.6% and GDP dynamics at 4%.
All 18 members of the Fed's Open Market Committee voted for a rate hike as early as 2022. 10 of them expect three rate hikes next year.
Bloomberg wrote ahead of the meeting that it could see a "historic turnaround in monetary policy" for the US central bank and the biggest shift in terms of rate hike projections.
The Fed's rate range has been kept close to zero since March 2020. In March last year, the authority urgently cut rates twice to support the economy during the coronavirus pandemic: first from 1.5-1.75% to 1-1.25% (marking the first unplanned rate cut since the 2008 crisis, The Wall Street Journal wrote) and then to 0-0.25%. Rates have remained at this low level ever since.
source: bloomberg.com, wsj.com
