Federal Reserve Plans to Ramp Up Fight Against Inflation
Concerns are growing over lingering inflation, prompting the Federal Reserve to consider speeding up its plan to raise interest rates. Federal Reserve officials plan to discuss stopping their bond-buying stimulus program early during a policy meeting next week, according to The Wall Street Journal. Ending the program in March instead of June would allow the Fed to raise interest rates sooner, in hopes of combating sticky inflation.
With the Central Bank pivoting to use most of its resources fighting inflation, less time will be available to manage the potential economic fallout from Omicron. "In every one of the previous waves of the virus, the Fed was able to react by effectively focusing on downside risks to growth, and trying to mitigate them," Aneta Markowska, chief financial economist at Jefferies told the New York Times. "They're no longer able to do that, because of inflation."
Several U.S. bank officials—from Wells Fargo, Bank of America and Goldman Sachs—recently announced concerns over ongoing inflation, adding pressure on the Federal Reserve to accelerate the timeline of its plan to curb inflation, a Reuters article says.
The Federal Reserve is set to meet Dec. 14-15 to discuss further action.