RE: Fed Interest announcement?24 Jan 2022 06:57
FT article FED expected to have first interest rate rise in March:
"The Federal Reserve is set to confirm its plans to raise interest rates in March for the first time since the onset of the pandemic, as the US central bank charts a more aggressive course towards monetary tightening in the face of sticky inflation.
Fed officials will convene this week for their inaugural policy meeting of 2022, the first since the central bank made its fight against rapid US consumer price growth its top priority.
The Fed has hardened its rhetoric in recent weeks about the risks posed by high inflation, with chair Jay Powell this month calling it a “severe threat” to a sustained economic expansion and a robust labour market recovery.
Its top policymakers have also made clear that they are willing to act forcefully to ensure inflation does not become ingrained, by considering raising interest rates “sooner or at a faster pace” than anticipated and swiftly shrinking the Fed’s enormous balance sheet this year.
Coupled with mounting evidence that inflation is broadening out and the labour market is quickly healing, the central bank is well placed to move in March, many Fed officials and Wall Street economists argue.
The labour market is tight, wage inflation is elevated and price inflation is substantially elevated,” said Peter Hooper, the global head of economic research at Deutsche Bank, who worked at the Fed for almost three decades. “Do we still need to be at a crisis-level of support for the economy? No.”
Beyond confirmation that the Fed could soon raise rates, economists are also looking for more clarity on the path forward after the first adjustment. The central bank’s policy statement is set to be released on Wednesday, followed by a press conference with Powell.
Fed-watchers are split as to whether the central bank will also announce an immediate end to its asset purchase programme, which is currently set to end in March. Powell affirmed that timeline earlier this month, but according to ING, there is “no reason” for the central bank to buy any additional bonds."
https://www.ft.com/content/c5f0e71f-e153-47ac-acc8-c31c2fa2a9b0
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