All eyes were on Federal Reserve Chairman Jerome Powell as the market digested the news Wednesday on what the central bank will do to keep the economy rebounding from the pandemic while countering the hot inflation that has consumers’ wallets sizzling.
Market observers were betting the Fed will conclude its bond buying — a move to help the economy in the pandemic’s earlier phases — quicker than expected and chart a course for more interest rate hikes.
The Fed said Wednesday afternoon it would reduce its bond purchases by $30 billion a month so it could end the program in March, instead of June. The Fed penciled in three rate hikes in 2022, instead of one hike.
Powell talked about the decision at a Wednesday afternoon press conference, saying the economy was strong enough now to handle the potential steps.
“We understand that our actions affect communities, families and businesses across the country. Everything we do is in service to our public mission. We, at the Fed, will do everything we can to complete the recovery in employment and achieve our price stability goal,” Powell said.