The Federal Reserve The U.S. government, which pointed to its inflation target being met, said Wednesday it will end its pandemic-era bond purchases in March, paving the way for three quarter-point interest rate hikes. in 2022, his way out of the policies he adopted at the beginning of the health crisis.
In the new economic projections for the United States, published at the end of a meeting of monetary politics In two days, US central bank officials forecast inflation to remain at 2.6% next year, down from 2.2% forecast in September, and that the unemployment rate will drop to 3.5 percent.
As a result, the median of the Fed authorities projected that the benchmark overnight interest rate would have to increase from its current level close to zero to 0.9% by the end of 2022, with increases that will continue in 2023 to a 1.6% and in 2024 to 2.1%, to try to bring inflation back to the central bank’s target of 2 percent.
Eventual rate hikes, the Fed said, will now depend solely on the trajectory of the labor market.
“Given that the inflation has exceeded 2% for some time, the Committee hopes it is appropriate to keep “current interest rates close to zero until labor markets have returned to full employment, the Fed said in a statement more clearly outlining” normalization. “of the central bank’s monetary policy after almost two years of extraordinary efforts to protect the economy from the aftermath of the pandemic.
A path that is still open by the new omicron variant of the coronavirus, which has added uncertainty about the course of the economy.
But the Fed, at this point, said economic growth is expected to be 4% next year, an increase over September’s 3.8% projections.
Fed Chairman Jerome Powell is scheduled to hold a press conference at 19:30 GMT to detail the new monetary policy statement and answer questions about the central bank’s economic outlook.
Reference-www.eleconomista.com.mx