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Fed sees faster time frame for rate hikes as inflation rises

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WASHINGTON (AP) -- The Federal Reserve signaled Wednesday that it may act sooner than previously planned to start dialing back the low-interest rate policies that have helped fuel a swift rebound from the pandemic recession but have also coincided with rising inflation.

The Fed's policymakers forecast that they would raise their benchmark short-term rate, which influences many consumer and business loans, twice by late 2023.

They had previously estimated that no rate hike would occur before 2024.

In a statement after its latest policy meeting, the Fed also said it expects the pandemic to have a diminishing effect on the economy as vaccinations increase, thereby allowing for more growth.

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Associated Press

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