Federal Reserve to withdraw stimulus more quickly

The Federal Reserve will cut back its stimulus programme more quickly than planned, as it ratchets up its response to rising inflation.
The US central bank had already announced it was tapering off the monthly support, introduced to bolster the economy during the pandemic.
But on Wednesday officials said the process would be speeded up, suggesting the stimulus will end by March.
The move opens the door to an interest rate rise in the first half of 2022.
“Economic activity is on track to expand at a robust pace this year, reflecting progress on vaccinations and the reopening of the economy,” said Federal Reserve chair Jerome Powell.
“In my view, we are making rapid progress toward maximum employment,” he said.
Demand remained “very strong”, although the arrival of the Omicron variant posed a risk to the recovery, he added.
Officials forecast that inflation will run higher next year than they had previously projected and that unemployment, the other measure targeted by the Federal Reserve, would fall to 3.5%.
As a result they forecast that benchmark interest rates would need to rise from current near-zero levels to 0.9% by the end of 2022.
The Federal Reserve began winding down its $120bn-a-month bond-buying programme in November, saying it would reduce the stimulus by $15bn a month.

Source – BBC