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Essentials of Monetary Policy

Federal Reserve (Fed). Rake Hikes Coming Soon

January 26, 2022
Francis Généreux
Principal Economist

The Omicron variant’s risk to the economy as well as the lack of clear signals during December’s meeting pointed to staying the course on rates at today’s meeting. However, the Fed still made some major decisions. First, it cleared the way for a rate hike as early as the next meeting on March 16. The Fed’s officials also decided to reduce their security purchases once again so that the quantitative policy ends by the time of the March meeting. Lastly, they released the principles framing any future reduction in the size of the Fed’s balance sheet.

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