The Federal Reserve will keep interest rates near zero, and it will begin its rate hike in mid-March, Federal Reserve Chairman Jerome Powell said Wednesday after the central bank’s two-day meeting.
The Fed will continue reducing its asset purchasing stimulus, buying $30 billion in February and indicating the program could end in March, Powell said Wednesday.
“With inflation well above 2 percent and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal fund rate,” the Fed’s board of governors said in a Wednesday press release.
— CNBC Now (@CNBCnow) January 26, 2022
Fed officials said they would keep rates near zero until inflation forecasts lowered to the bank’s 2% goal and until the labor market returns to levels in line with maximum employment.
Inflation has soared to a near four-decade high, with the Consumer Price Index (CPI) growing 7% as of December 2021 on a year-over-year basis. Meanwhile, the Producer Price Index (PPI), which measures inflation at the wholesale level, surged to 9.7% on a year-over-year basis in December, its highest level ever recorded. (RELATED: Republicans Slam Biden Policies, Say They’re Clobbering Working Families With Record Inflation)
Meanwhile, the U.S. economy added only 199,000 jobs in December, but unemployment dropped to 3.9% from November’s 4.2% figure. Roughly 6.5 million Americans remained out of work at the end of 2021 as the economy was still 3.5 million jobs short of its pre-pandemic level.
Concerns over the Fed’s decision regarding rate hikes have led to turbulent and volatile markets this week, with the S&P 500 falling 10% Monday and entering correction territory before snapping back up before the close of trading.
Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact email@example.com.