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Fed officials reinforce plan for rapid exit of economic aid

The central bank’s planned moves would be a rapid pace of change from the last time it raised interest rates, from 2015 to late 2018. After that, officials just narrowed the balance sheet. gradual accounting and interest rates push up icy, fastest once a quarter.

Borrowing costs have begun to rise as investors adjust to the Fed’s more rapid plans. Market expectations interest rates are up six or seven quarters this year. Rate per Mortgage 30 years has grown from about 2.9% last fall – when the Fed started to pivot on policy – now to 3.9%.

The Fed’s policy changes “will reduce inflation over time, while maintaining an inclusive recovery,” Brainard said, adding that when the Fed signals it will raise rates, “The market is clearly in line with that.”

However, with inflation surging, wages surging and signs of labor market conditions energizing, some Fed officials worry that the central bank needs to move even faster.

For example, Ms. Bowman said she was still willing to raise half a percentage point in March – something her colleague James Bullard, president of the Federal Reserve Bank of St. Louis, also suggested.

“I will be closely monitoring the data to assess the appropriate level of increase at the meeting in March,” Ms. Bowman said.

But Mr. Bullard, who has repeatedly said he would like to see rates rise by a full percentage point of a rate hike in July, has also noted that he will delay the chairman, Jerome H. Powell , about the size of the initial gain. . And other members of the Fed’s policy-setting committee have suggested they don’t think starting with a half-point increase is necessary, suggesting that a smaller increase may be more likely.

“There’s really no kind of compelling argument that you have to be faster in the first place,” Williams, the president of the powerful Federal Reserve Bank of New York, told reporters last week.

https://www.nytimes.com/2022/02/22/business/economy/fed-interest-rates.html Fed officials reinforce plan for rapid exit of economic aid

Fry Electronics Team

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