United States Interest Rate

Fed Chair Powell sees inflationary pressures to last well into the middle of 2022 and expects the Fed to raise interest rates and end asset purchases this year while a balance-sheet contraction could perhaps start later in 2022. During his Senate confirmation hearing, Powell also noted the Fed could raise rates more if needed, to get inflation back to the target level and prevent it from becoming entrenched. The Fed announced at its December 2021 meeting it would end its pandemic-era bond purchases in March, paving the way for three interest rate hikes by the end of 2022. But FOMC minutes released later showed a more hawkish Fed, and the central bank signalled it may become warranted to increase the federal funds rate sooner or at a faster pace than previously anticipated.