The US central bank said surging inflation is guiding its decision about when to lift interest rates. Two experts on financial markets explain what might happen next.
Until recently the Federal Reserve had been purchasing roughly $120 billion of assets every month to support the US economy. The Fed began scaling back those purchases in November and doubled the pace on Dec. 15.
Brainard has been pushing the Fed to consider exposure to climate change in its regulation and analysis of banks. That’s sparked fury from Republican senators – and even a Nobel Prize winner.
After weeks of mulling, Biden decided to give Powell another term as Fed chair, which means he will have more influence over the trajectory of inflation than anyone else.
October’s employment report was rosy, with more than 500,000 jobs added in the month. There were also signs that the American workforce was heading back to the old normal.
The Federal Reserve decided to slow its pace of bond-buying, potentially the beginning of the end of a program that’s been supporting the economy since March 2020.
Central bankers are expected to discuss the racial income and wealth gaps during the virtual Jackson Hole retreat. But an economist argues that the Fed is not suited for addressing these issues.
The RBA shouldn’t be spooked into raising interest rates, but the prospect of inflation in the next few years is an important consideration for central banks around the world.