Here’s what happened…
Almost all Federal Reserve officials have agreed recently that skyrocketing inflation and a quickly recovering labor market could cause a quicker than expected interest rate hike as politicians move to back off of pandemic-era support for the American economy.
Shortly after the U.S. central bank’s Dec. 14-15 meeting, it appears the lawmakers strongly believe they will reach their government goal if the economy continues to improve. This will result in the Fed’s first interest rate hike in three years.
In March 2020 the Fed cut the rated down to near zero as the pandemic began to tear up the nation.
According to Fox, “Participants generally noted that, given their individual outlooks for the economy, the labor market and inflation, it may become warranted to increase the federal funds rate sooner or at a faster pace than participants had earlier anticipated,” the minutes, released Wednesday, said. “Some participants also noted that it could be appropriate to begin to reduce the size of the Federal Reserve’s balance sheet relatively soon after beginning to raise the federal funds rate.”