Fed plans to raise rates in effort to cool inflation

good afternoon at the Federal Reserve. We are strongly committed to achieving the monetary policy goals that Congress has given us maximum employment and price stability today. In support of these goals, the Federal Open Market Committee kept interest rates near zero and updated its assessment of the progress of the that the economy has made toward the criteria specified in the committee's forward guidance for interest rates. In addition, in light of the strengthening labor market and elevated inflation pressures, we decided to speed up the reductions in our asset purchases. Economic activity is on track to expand at a robust pace this year, reflecting progress on vaccinations and the reopening of the economy. Aggregate demand remains very strong, buoyed by fiscal and monetary policy support and the healthy financial positions of households and businesses. The rise in covid cases in recent weeks, along with the emergence of the omicron variant, pose risk to the risks to the outlook. Beginning in mid January, we will reduce the monthly pace of our net asset purchases by $20 billion $10 billion mortgage-backed securities. If the economy evolves broadly as expected, similar reductions in the pace of net asset purchases will likely be appropriate each month, implying that increases in our securities holdings would cease by mid March, a few months sooner than we anticipated in early November. We are phasing out our purchases more rapidly because with elevated inflation pressures and a rapidly strengthening labor market, the economy no longer needs increasing amounts of policy support.

The Federal Reserve signaled Wednesday that it plans to begin raising its benchmark interest rate as soon as March, a key step in reversing its pandemic-era low-rate policies that have fueled hiring and growth but also escalated inflation.With high inflation squeezing consumers and businesses and unemployment falling steadily, the Fed also said it would phase out its monthly bond purchases, which have been intended to lower longer-term rates, in March.The central bank바카라 게임 웹사이트�s actions are sure to make a wide range of borrowing 바카라 게임 웹사이트� from mortgages and credit cards to auto loans and corporate credit 바카라 게임 웹사이트� costlier over time. Those higher borrowing costs, in turn, could slow consumer spending and hiring. The gravest risk is that the Fed바카라 게임 웹사이트�s abandonment of low rates could trigger another recession.In a statement issued after its latest policy meeting, the Fed it "expects it will soon be appropriate바카라 게임 웹사이트� to raise rates.Though the statement didn't specifically mention March, half the Fed's policymakers have expressed a willingness to raise rates by then, including some members who have long favored low rates to support hiring.By raising rates, the Fed will be betting that it can slow inflation without weakening the economy too much. Speaking at a news conference, Chair Jerome Powell expressed his view, as he has before, that controlling inflation is itself vital to a strong job market.바카라 게임 웹사이트�The best thing we can do to support continued labor market gains,바카라 게임 웹사이트� Powell said, 바카라 게임 웹사이트�is to promote a long expansion, and that will require price stability.바카라 게임 웹사이트�바카라 게임 웹사이트�I think there바카라 게임 웹사이트�s quite a bit of room," he added, "to raise interest rates without threatening the labor market. This is by so many measures an historically tight labor market.바카라 게임 웹사이트�The Fed on Wednesday also set out principles it will follow once it decides to reduce its nearly $9 trillion in bond holdings, a sum that has more than doubled since the pandemic struck nearly two years ago. Some analysts expect the Fed to begin doing so as soon as July, a move that would contribute to tighter credit.The central bank's latest policy statement follows dizzying gyrations in the stock market as investors have been gripped by fear and uncertainty over just how fast and far the Fed will go to reverse its low-rate policies, which have nurtured the economy and the markets for years. The broad S&P 500 index fell nearly 10% this month before rebounding slightly Wednesday.Asked about the stock market's wild volatility, Powell stressed that the Fed바카라 게임 웹사이트�s 바카라 게임 웹사이트�ultimate focus바카라 게임 웹사이트� is on the 바카라 게임 웹사이트�real economy.바카라 게임 웹사이트� But he added: 바카라 게임 웹사이트�We feel like the communications we have with market participants and the general public are working. Monetary policy works significantly through expectations.바카라 게임 웹사이트�High inflation has become a serious political threat to President Joe Biden and congressional Democrats, with Republicans pointing to rising prices as one of their principal lines of attack as they look toward the November elections.Yet Biden said last week that it was 바카라 게임 웹사이트�appropriate바카라 게임 웹사이트� for Powell to adjust the Fed바카라 게임 웹사이트�s policies. And congressional Republicans have endorsed Powell바카라 게임 웹사이트�s plans to raise rates, providing the Fed with rare bipartisan support for tightening credit.A reversal of the Fed's bond purchases would add to that tightening. The purchases have been intended to reduce longer-term interest rates to spur borrowing and spending. Many investors also saw the bond buying as helping fuel stock market gains by pouring cash into the financial system.Earlier this month, minutes of the Fed바카라 게임 웹사이트�s December meeting revealed that the central bank was considering reducing its bond holdings by not replacing bonds that mature 바카라 게임 웹사이트� a more aggressive step than merely ending its purchases. The impact of reducing the Fed바카라 게임 웹사이트�s bond stockpile isn바카라 게임 웹사이트�t well known. But the last time that the Fed raised rates and reduced its balance sheet simultaneously was in 2018. The S&P 500 stock index fell 20% in three months.By not replacing some of its bond holdings, the Fed in effect reduces demand for Treasuries. This raises their yields and makes borrowing more expensiveSome analysts have said they aren바카라 게임 웹사이트�t sure how big the impact on interest rates will be or how much the Fed will rely on reducing its balance sheet to affect interest rates.All of which means the Powell Fed faces a delicate and even risky balancing act. If the stock market is engulfed by more chaotic declines, economists say, the Fed might decide to delay some of its credit-tightening plans. Modest drops in share prices, though, won바카라 게임 웹사이트�t likely affect the Fed바카라 게임 웹사이트�s thinking.Some economists have expressed concern that the Fed is already moving too late to combat high inflation. Others say they worry that the Fed may act too aggressively. They argue that numerous rate hikes could unnecessarily slow hiring. In this view, high prices mostly reflect snarled supply chains that the Fed바카라 게임 웹사이트�s rate hikes are powerless to cure.This week바카라 게임 웹사이트�s Fed meeting comes against the backdrop of not only high inflation 바카라 게임 웹사이트� consumer prices have surged 7% in the past year, the fastest pace in nearly four decades 바카라 게임 웹사이트� but also an economy gripped by another wave of COVID-19 infections.Powell has acknowledged that he failed to foresee the persistence of high inflation, having long expressed the belief that it would prove temporary. The inflation spike has broadened to areas beyond those that were affected by supply shortages 바카라 게임 웹사이트� to apartment rents, for example 바카라 게임 웹사이트� which suggests it could endure even after goods and parts flow more freely.

With high inflation squeezing consumers and businesses and unemployment falling steadily, the Fed also said it would phase out its monthly bond purchases, which have been intended to lower longer-term rates, in March.

The central bank바카라 게임 웹사이트�s actions are sure to make a wide range of borrowing 바카라 게임 웹사이트� from mortgages and credit cards to auto loans and corporate credit 바카라 게임 웹사이트� costlier over time. Those higher borrowing costs, in turn, could slow consumer spending and hiring. The gravest risk is that the Fed바카라 게임 웹사이트�s abandonment of low rates could trigger another recession.

In after its latest policy meeting, the Fed it "expects it will soon be appropriate바카라 게임 웹사이트� to raise rates.

Though the statement didn't specifically mention March, half the Fed's policymakers have expressed a willingness to raise rates by then, including some members who have long favored low rates to support hiring.

By raising rates, the Fed will be betting that it can slow inflation without weakening the economy too much. Speaking at a news conference, Chair Jerome Powell expressed his view, as he has before, that controlling inflation is itself vital to a strong job market.

바카라 게임 웹사이트�The best thing we can do to support continued labor market gains,바카라 게임 웹사이트� Powell said, 바카라 게임 웹사이트�is to promote a long expansion, and that will require price stability.바카라 게임 웹사이트�

바카라 게임 웹사이트�I think there바카라 게임 웹사이트�s quite a bit of room," he added, "to raise interest rates without threatening the labor market. This is by so many measures an historically tight labor market.바카라 게임 웹사이트�

The Fed on Wednesday also set out principles it will follow once it decides to reduce its nearly $9 trillion in bond holdings, a sum that has more than doubled since the pandemic struck nearly two years ago. Some analysts expect the Fed to begin doing so as soon as July, a move that would contribute to tighter credit.

The central bank's latest policy statement follows dizzying gyrations in the stock market as investors have been gripped by fear and uncertainty over just how fast and far the Fed will go to reverse its low-rate policies, which have nurtured the economy and the markets for years. The broad S&P 500 index fell nearly 10% this month before rebounding slightly Wednesday.

Asked about the stock market's wild volatility, Powell stressed that the Fed바카라 게임 웹사이트�s 바카라 게임 웹사이트�ultimate focus바카라 게임 웹사이트� is on the 바카라 게임 웹사이트�real economy.바카라 게임 웹사이트� But he added: 바카라 게임 웹사이트�We feel like the communications we have with market participants and the general public are working. Monetary policy works significantly through expectations.바카라 게임 웹사이트�

High inflation has become a serious political threat to President Joe Biden and congressional Democrats, with Republicans pointing to rising prices as one of their principal lines of attack as they look toward the November elections.

Yet Biden said last week that it was 바카라 게임 웹사이트�appropriate바카라 게임 웹사이트� for Powell to adjust the Fed바카라 게임 웹사이트�s policies. And congressional Republicans have endorsed Powell바카라 게임 웹사이트�s plans to raise rates, providing the Fed with rare bipartisan support for tightening credit.

A reversal of the Fed's bond purchases would add to that tightening. The purchases have been intended to reduce longer-term interest rates to spur borrowing and spending. Many investors also saw the bond buying as helping fuel stock market gains by pouring cash into the financial system.

Earlier this month, minutes of the Fed바카라 게임 웹사이트�s December meeting revealed that the central bank was considering reducing its bond holdings by not replacing bonds that mature 바카라 게임 웹사이트� a more aggressive step than merely ending its purchases. The impact of reducing the Fed바카라 게임 웹사이트�s bond stockpile isn바카라 게임 웹사이트�t well known. But the last time that the Fed raised rates and reduced its balance sheet simultaneously was in 2018. The S&P 500 stock index fell 20% in three months.

By not replacing some of its bond holdings, the Fed in effect reduces demand for Treasuries. This raises their yields and makes borrowing more expensive

Some analysts have said they aren바카라 게임 웹사이트�t sure how big the impact on interest rates will be or how much the Fed will rely on reducing its balance sheet to affect interest rates.

All of which means the Powell Fed faces a delicate and even risky balancing act. If the stock market is engulfed by more chaotic declines, economists say, the Fed might decide to delay some of its credit-tightening plans. Modest drops in share prices, though, won바카라 게임 웹사이트�t likely affect the Fed바카라 게임 웹사이트�s thinking.

Some economists have expressed concern that the Fed is already moving too late to combat high inflation. Others say they worry that the Fed may act too aggressively. They argue that numerous rate hikes could unnecessarily slow hiring. In this view, high prices mostly reflect snarled supply chains that the Fed바카라 게임 웹사이트�s rate hikes are powerless to cure.

This week바카라 게임 웹사이트�s Fed meeting comes against the backdrop of not only high inflation 바카라 게임 웹사이트� consumer prices have surged 7% in the past year, the fastest pace in nearly four decades 바카라 게임 웹사이트� but also an economy gripped by another wave of COVID-19 infections.

Powell has acknowledged that he failed to foresee the persistence of high inflation, having long expressed the belief that it would prove temporary. The inflation spike has broadened to areas beyond those that were affected by supply shortages 바카라 게임 웹사이트� to apartment rents, for example 바카라 게임 웹사이트� which suggests it could endure even after goods and parts flow more freely.

Fed plans to raise rates in effort to cool inflation

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