Economics
Powell Declares Inflation Big Threat as Fed Signals Rate Hikes
- Officials speed taper, on track to end bond buying mid-March
- Fed forecasts three rate hikes in 2022 and three more in 2023
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Federal Reserve Chair Jerome Powell signaled on Wednesday that inflation is now enemy No. 1 to keeping the U.S. economic expansion on track and returning the labor market to something approaching ebullient pre-pandemic levels.
In an abrupt policy pivot, the Fed sped up the drawdown of its asset-purchase program and laid out a road map for a series of interest-rate increases over coming years, starting with three hikes in 2022. Powell also raised the possibility that the central bank might begin to withdraw liquidity from the financial system before too long by reducing its massive balance sheet.