In a statement on Wednesday, the bank said that the support purchases of bonds will be reduced by 30 billion dollars a month. It is twice as fast as previously announced, and the bond purchases will thus probably be completed in March.
Until further notice, the key policy rate will be kept at around zero per cent. But next year there may be three interest rate hikes – and the first may come in the spring.
As recently as a few months ago, the bank envisaged that interest rates could remain at a historically low level until 2023.
The background for the decision is that unemployment is falling, while inflation is at its highest level in almost 40 years.
The bank’s interest rate committee states that the reopening of the economy and imbalances related to supply and demand have contributed to high inflation levels.
Governor Jerome Powell nevertheless has a positive view of developments in the US economy.
– The economic activity is likely to grow at a solid pace this year, which reflects progress in the vaccination and reopening of the economy, he says.
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