A major change is underway at the central bank for removing its pandemic enforced easing policies soon. This may lead to hike in rates sooner than expected.
Comments from central bank officials suggest that it will decide to double the pace of its taper at its meeting next week.
Yet there is no consensus when the rate hike will begin, but faster taper is designed for giving central bank the flexibility for increasing rates.
Fed Reserve President James Bullard expressed that he expects asset purchases to end soon so that Fed Reserve can position itself for a possible hike in rate.
Several other officials of Fed Reserve have also spoke openly regarding the possibility of multiple hikes in rates next year for combating the increasing inflation.
Economic data in the month of November caused a big role in the Fed Reserve’s shift in approach. The CPI showed more widespread and higher inflation.
