Breaking: Fed Leaves Interest Rates Unchanged, Doubles Taper To $30 Billion Monthly
Policymakers at the United States Federal Reserve have voted unanimously to leave interest rates at status quo at the end of their two-day meeting on Wednesday.
According to a CNBC report, the Fed says it remains committed to use every tool at its disposal to support the nation’s economic recovery by buying bonds at a clip of $30bn per month.
Interest Rates Hike Unavoidable
Meanwhile, starting from January 2022, Fed will be buying $60 billion of bonds. That is half the level it was buying before the November taper.
Recall that the Fed was tapering by $15 billion monthly in November, and going by this news, has doubled that in the month of December. And by 2022, the Fed hopes to then fast-track the reduction even further.
After all that is done however, maybe sometime around late winter or early spring, there are expectations that the central bank will then start increasing interest rates.
And according to the predictions of Fed officials on Wednesday, there might be no less than 3 interest rates increases in 2022 alone, with two more in 2023, and another two in 2024.
Evolution of Monetary Policy Is Highly Necessary — Fed Chair Jerome Powell
Speaking at his post-meeting news conference, Fed Chair Jerome Powell says that the current economic situation and new developments has warranted this evolution of monetary policy. Powell also mentioned that all policy will be focused on supporting the economy.
Meanwhile, there was an untold air of uncertainty around the monetary policy before the Wednesday meeting, especially with regards to how its outcome will impact the crypto markets and the U.S stocks.
As expected, news of interest rates remaining unchanged, immediately sent all markets into the greens.
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