The U.S Fed announced plans to double the pace at which it tapers its bond-buying program put in place at the start of the pandemic. The Fed also expects to raise interest rates three times next year to tame “persistent inflation”.
More Details🧐 Starting January 2022, the Fed will begin decreasing its bond purchases by $30 billion a month instead of the $15 billion it had previously announced. Once tapering is complete sometime mid-2022, the Fed expects to start raising interest rates, which were left unchanged at this week’s meeting.
Why is this Important🤔 Ending the bond purchases earlier would give the Fed more flexibility to raise interest rates sooner, to keep inflation from spiraling out of control. The S&P 500 was down 0.2% earlier in the trading session but rose to a 0.5% gain after the Fed announced the results of its latest meeting.