1/3/2023 0 Comments Quicken wholesale![]() It has weighed heavily on consumers, especially lower-income households and particularly for everyday necessities, and negated the higher wages many workers have received. Sign up for The Gleaner’s morning and evening newsletters.īut the run-up in prices has persisted longer than the Fed expected and has spread from goods like food, energy and autos to services like apartment rents, restaurant meals and hotel rooms. The Fed had earlier characterised the inflation spike as mainly a “transitory” problem that would fade as supply bottlenecks caused by the pandemic were resolved. The shift marked Powell’s acknowledgement that with inflation pressures rising, the Fed needed to begin tightening credit for consumers and businesses faster than he had thought just a few weeks earlier. The policy change the Fed announced in a statement after its latest meeting, had been signalled in testimony that Chair Jerome Powell gave to Congress two weeks ago. The key rate, now pinned near zero, influences many consumer and business loans, whose rates would likely also rise. The Fed’s new forecast that it will raise its benchmark short-term rate three times next year is up from just one rate hike it had projected in September. The accelerated timetable puts the Fed on a path to start raising rates in the first half of next year. The bond purchases were intended to hold down long-term rates to aid the economy, but are no longer needed with unemployment falling and inflation at a near-40-year high. In an abrupt policy shift, the Fed announced on Wednesday that it will shrink its monthly bond purchases at twice the pace it previously announced, likely ending them altogether in March. ![]() ![]() The United States Federal Reserve will quicken the pace at which it’s pulling back its support for the post-pandemic US economy as inflation surges, and it expects to raise interest rates three times next year. ![]()
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