• D. Brit

FED Will Double Pace of Tapering and Expects 3 Rate Hikes in 2022

What Happened:

  • On Wednesday, the Federal Reserve announced that it will double the pace of its tapering of monthly bond purchases with a projected end date for all purchases by March, 2022.

  • The new forecast also projects that the FED will raise its short-term rate three times next year, instead of just one time in September, as originally projected.

  • FED Chair Jerome Powell indicated that these policy changes were likely to occur when he spoke before Congress. According to Powell, the policy changes are in reaction to increasing inflation and faster progress in the labor market.

  • In all, the new policies will lead the FED to a much tighter credit policy for consumers and businesses.

Photo Source: Federal Reserve

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