Headline Roundup • December 15th, 2021
Fed Accelerates Stimulus Tapering, Signals 3 Interest Rate Hikes in 2022
Economic Policy,Economy And Jobs,Federal Reserve,Banking And Finance,Jerome Powell,Inflation,Unemployment
Summary from the AllSides News Team
In response to high inflation, the Federal Reserve said Wednesday that it would speed up its tapering of pandemic-era bond purchases, projecting up to three interest rate hikes in 2022.
The Fed will double its monthly reduction in bond purchases from $15 billion to $30 billion. In addition to the 2022 interest rate hikes, the Fed projected two hikes per year in 2023 and 2024. The Fed’s Federal Open Market Committee also raised its inflation expectations and lowered its unemployment expectations. “We’re not going back to the same economy we had in February of 2020,” Fed Chairman Jerome Powell said Wednesday. “The post-pandemic labor market and the economy in general will be different, and the maximum level of employment that’s consistent with price stability evolves over time.”
Stocks rose following the news, driving headlines in business outlets. Coverage was mostly balanced across the spectrum. Outlets on the right were more likely to use phrasing like “skyrocketing inflation” and “inflation soars.”
Featured Coverage of this Story
Sarahbeth Maney/The New York Times
Federal Reserve policymakers on Wednesday said they will cut back on their stimulus more quickly at a moment of rapid inflation and strong economic growth, capping a challenging year with a pronounced policy pivot that could usher in higher interest rates in 2022.
A policy statement released by the central bank detailed a more rapid end to the monthly bond-buying that the Fed has been using throughout the pandemic to keep money chugging through markets and to bolster growth, just as a fresh set of economic projections showed that policymakers expect to raise interest...
Sarah Silbiger/Pool Photo via AP, File / Associated Press
The Federal Reserve on Wednesday announced plans to accelerate the wind down of pandemic-era stimulus for the U.S. economy and penciled in at least three interest rate hikes next year as policymakers seek to combat the hottest inflation in four decades.
The Federal Open Market Committee said at the conclusion of its two-day policy-setting meeting this week that it would double the reduction of its asset-purchase program to $30 billion a month, a timeline that could phase out the purchases entirely by March rather than the original June trajectory laid out last...
The Federal Reserve provided multiple indications Wednesday that its run of ultra-easy policy since the beginning of the Covid pandemic is coming to a close, making aggressive policy moves in response to rising inflation.
For one, the central bank said it will accelerate the reduction of its monthly bond purchases.
The Fed will be buying $60 billion of bonds each month starting in January, half the level prior to the November taper and $30 billion less than it had been buying in December. The Fed was tapering by $15 billion...
