Most Federal Reserve officials agreed last month that surging inflation and a rapidly recovering labor market could warrant a faster-than-expected interest rate hike as policymakers seek to wind down pandemic-era support for the U.S. economy.
Minutes from the U.S. central bank's Dec. 14-15 meeting show that many policymakers believe they will reach their employment goal soon if economic conditions continue to improve, opening the door to the Fed's first interest rate hike in three years. The Fed slashed rates to near zero in March 2020 as the nation confronted an unprecedented pandemic that froze economic activity and plunged the country into its steepest recession in almost a century.
At the conclusion of their two-day meeting last month, policymakers announced they would double the tapering of a massive bond-buying program, putting the Fed on pace to end the program by March. In making the decision, they cited improvements in the labor market and the hottest inflation in nearly 40 years.
Officials now project rates to stand at 0.9% at the end of 2022, 1.6% at the end of 2023 and 2.1% at the end of 2024.
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