Fed Likely to Signal Rate Hike This Week
Chattanooga, TN, January 25, 2022-With inflation punishing consumers and threatening the economy, the Federal Reserve this week will likely signal its intent to begin raising interest rates in March for the first time in three years, reports the Chattanooga Times Free Press.
“The Fed's challenges will get only harder from there.
“Among the central bank officials, there is broad support for a rate increase-one that would come much sooner than the officials had expected just a few months ago. But after that, their policymaking will become more complicated and could sow internal divisions, especially as a number of new officials join the Fed.
“How many times, for example, should the Fed raise rates this year? When should it start shedding its enormous stockpile of bonds, a move that would contribute to tighter credit? And how should the Fed respond if inflation eases later this year, as many officials expect, yet still remains far above its 2% annual target?
“Some economists have expressed concern that the Fed is already moving too late to combat high inflation. Others say they worry that the Fed may act too aggressively. They argue that numerous rate hikes would risk causing a recession and wouldn't slow inflation in any case. In this view, high prices mostly reflect snarled supply chains that the Fed's rate hikes are powerless to cure.”