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Most Of The Federal Reserve Board Believes That Interest Rates Can Be Raised Sooner


The Fed released the minutes of its December meeting that most members believed that given the current economic, labor market and inflation conditions, there may be justifications for raising interest rates earlier or faster than originally expected. Therefore, a faster termination of the asset purchase plan will help the Open Market Committee formulate policies to deal with various economic conditions that are likely to arise. In addition, some members believe that it may be appropriate for the bureau to start reducing the scale of its balance sheet shortly after raising interest rates. The minutes of the meeting reflect that with high inflation, officials in the bureau seem to have given up the idea of waiting for the labor market to return to pre-pandemic levels before starting to raise interest rates.
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