Officials at Federal reserve at their earlier this month expressed concerns on accelerated inflation and are willing to raise interest if inflation remains elevated.
In the FED’s meeting minutes, the committee that sets interest rate indicated to wrap up extraordinary montary support amid pandemic.
During the meeting great emphasis was put into inflation concern and memebers of the committee showed willingness to raise rates if inflation pressures posed risk to price stability over the long run and employment objective. However, the committee remains patient.
The meeting minute noted, “various participants noted that the Committee should be prepared to adjust the pace of asset purchases and raise the target range for the federal funds rate sooner than participants currently anticipated if inflation continued to run higher than levels consistent with the Committee’s objectives,”.
The FOMC in its post-meeting statement said substantial further progress in economy would allow at $15 billion of reduction in purchases on a monthly basis with $10 billion in treasures and $5 billion in MBS. They further stated the schedule would continue through at least December and would continue to move forward until the effectiveness of the program comes to an end possibly by late spring or early summer 2022.
It is important to note some FOMC members wanted a rates hike sooner.