LAST UPDATE 19:35
Federal Reserve Chairman Jerome Powell said today that the US Federal Reserve is likely to discuss at its next meeting the possibility of accelerating its gradual cuts in its bond-buying program amid a strong economy and speculation that inflation is rallying. is expected to continue until the middle of next year.
“Right now, the economy is very strong and inflationary pressures are high. In this context, the right approach is, in my view, to look at the completion of bond markets – something we announced at the November meeting – maybe a few. “months earlier,” Powell told the Senate Banking Committee, according to Reuters. “I expect we will discuss this at our next meeting in a few weeks,” he said, warning that inflation may not be a transitional phenomenon.
The Fed began cutting back on emergency support to the economy this month. The bank decided to gradually reduce its monthly purchases from the level of 120 billion dollars in order to complete the program by June next year. The Fed launched the program in early 2020 to help the economy overcome the crisis of the coronavirus pandemic.
Some Fed officials, however, wanted the central bank to accelerate its pace to complete the program sometime in the spring, paving the way for further rate hikes from their all-time lows to curb high inflation.
Powell’s latest statements seem to show that he is ready to embrace this view, promoting a faster decline in markets amid high inflation. The next Fed monetary policy meeting is on December 14-15.
Concern about the Omicron mutation as well
The chairman of the Federal Reserve also expressed concern about the new coronavirus strain Omicron, noting that the appearance of the new mutation poses downward risks to the economy and reinforces uncertainty about the outlook for inflation.
“Increased concern about the virus may reduce people’s willingness to work in their office, which could slow progress in the job market and exacerbate supply chain disruptions,” Powell said.
The Fed will wait for more details about Omicron before making its monetary policy decisions, Powell said.
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Source From: Capital
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