Later today, the Fed is expected to announce a shift in policy that will clear the way for a first interest rate hike next year. CNBC reports the markets are anticipating that the Fed will speed up the ending of its bond buying program from June to March. Some economists are waving a red flag as they’re alarmed by what they’re currently seeing.
The Federal Reserve is expected to take a very big step toward its first rate hike
The Federal Reserve is expected to announce a dramatic policy shift Wednesday that will clear the way for a first interest rate hike next year.
Markets are anticipating the Fed will speed up the wind-down of its bond buying program, changing the end date to March from June.
That would free the central bank to start raising interest rates from zero, and Fed officials are expected to release a new forecast showing two to three interest rate hikes in 2022 and another three to four in 2023. Previously, there had been no consensus for a rate hike in 2022, though half of the Fed officials expected at least one.
Keep reading the story, here.
CNN Business/Julia Horowitz
Is the Federal Reserve blowing its best chance to fight inflation?
The Federal Reserve, faced with the highest jump in inflation in almost four decades, is preparing to pivot.
What’s happening: Gone are the days when Chair Jerome Powell said inflation was “transitory.” When the Fed wraps up its final meeting of the year on Wednesday, it’s expected to announce that it will wind down its emergency bond-buying program faster than expected as it tries to curb rising prices.
The central bank will also send a message to investors about how soon it expects to start raising interest rates from rock-bottom levels.
But some economists and executives are alarmed by what they’re seeing.
Continue reading, here.
Federal Reserve about to turn more aggressive, economist warns
Moody’s Analytics chief economist Mark Zandi predicted the Fed is going to be more “aggressive” on “Mornings with Maria” Wednesday, and expects officials to reveal first steps in combating a 39-year inflation high.
MARK ZANDI: They’re going to turn more aggressive here. They’re going to tell us that they’re going to wind down their bond buying or quantitative easing more quickly, probably get it done by March of next year, and then lay the foundation for rate hikes.
You can watch the full interview, here.