AMERICAN CENTRAL BANK SIGNALS INTEREST RATES MAY RISE AS SOON AS 2022

Sep 22, 2021

By Bob Komsic

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The U.S. Federal Reserve Board is indicating that it could start raising its benchmark interest rates some time next year, earlier than was envisioned only three months ago.
This is seen as a sign the American central bank is worried high inflation could persist.
In a statement, the Fed also says it’ll likely begin slowing the pace of its monthly bond purchases ”soon” if the economy continues strengthening.
Those purchases have been intended to lower longer-term loan rates to encourage borrowing and spending.
All this reflects the Fed’s belief that the U.S. economy has recovered enough from the COVD-19 recession for it to soon start pulling back its support after the pandemic hit last year.
As the economy’s steadily recovered, inflation has gone up to a three-decade high, increasing pressure on the Fed to pull back.
In its updated quarterly projections, Fed officials now expect to raise their key short-term rate once in 2022, three times in 2023 — one more than projected in June — and three times in 2024.
That rate has stayed near zero since March 2020.
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