On December 14-15, the Fed postponed the deadline for the final winding-up of the asset repurchase program from June to March. The updated forecasts assume three increases in the key rate over the next two years.
The forecast in September allowed one increase in 2022 and two – in 2023. The volume of the reduction in bond purchases was doubled – from $ 15 billion to $ 30 billion. On November 30, Fed Chairman Jerome Powell did not rule out such a scenario during his speech before the Senate. The reason for the revision of the Fed’s position was the increase in inflation, – reported by BitGlobalOne.
The Open Market Committee raised its inflation forecast – from 4.2% to 5.3% at the end of 2021 and from 2.2% to 2.6% in 2022.
The head of the Federal Reserve drew attention to the risks of the spread of the omicron strain and allowed a slowdown in the rate of tightening of policy in the event of a slowdown in economic growth. Separately, he called the valuation of assets “slightly overstated”.