NS Federal Reserve likely to abandon pandemic-era stimulus programs as inflation continues to soar and unemployment declines.
The Fed, under the leadership of Jerome Powell, has signaled that it will ease its bond-buying stimulus as a result of the COVID-19 pandemic in March 2022, ahead of its previously scheduled date in June, The Wall Street Journal report.
According to the WSJ, a reduction in the rate of acceleration is expected to trigger a rate hike. The central bank will meet on December 14-15, after which a more specific plan is expected to be announced.
The slower and faster rate hikes anticipated is a signal that the Fed is pivoting to combat rising inflation rather than an attempt to bring jobs back to pre-pandemic levels.
“You have seen our policy adapt and you will see it continue to adapt,” Powell said during a Senate Banking hearing on Nov.
“We now look at a very strong economy and high inflationary pressures and that means it is appropriate” for a gradual slowdown, Powell added as request of Louisiana Republican Senator John Kennedy when asked about that possibility.
US economy to add just 210,000 jobs in November, much lower than experts’ forecast of more than 500,000, Bureau of Labor Statistics announced Friday. In addition, the unemployment rate fell to 4.2% in November, down from 4.6% in October.
“The recent increase in COVID-19 cases and the emergence of the Omicron variant pose downside risks to employment and economic activity and increased uncertainty over inflation,” Powell wrote. before a Senate Banking hearing on Nov.
Greater concerns about the virus could reduce people’s willingness to work in-person, which would slow labor market progress and intensify supply chain disruptions, said Powell.
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https://www.tampafp.com/fed-to-pivot-away-from-pandemic-era-stimulus-as-unemployment-falls-and-inflation-soars/ Bored to pivot away from pandemic-era stimulus as unemployment falls and inflation soars