The Federal Reserve, signaling that its inflation target has been met, said on Wednesday that it will end its purchases of bonds adopted during the pandemic in March, paving the way for three increases of 0.25 percentage point in interest rates until the end of 2022, as the monetary policies implemented at the beginning of the health crisis end.
In new economic forecasts released after the end of the two-day monetary policy meeting, officials predicted that inflation will stay at 2.6% next year, compared with the 2.2% rate projected in September. Furthermore, the unemployment rate would drop to 3.5%.
As a result, the median of Fed officials’ projections shows that the Fed’s benchmark one-day interest rate would need to be raised from its current level, close to zero, to 0.90% by the end of 2022, with continued increases in 2023 (to 1.6%) and 2024 (to 2.1%) to bring inflation back to the central bank’s 2% target.
Reference: CNN Brasil
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