Under Chair Jerome Powell, the Federal
Reserve is poised this week to execute a sharp
turn toward tighter interest-rate policies with
inflation accelerating and unemployment falling
faster than expected.
On Wednesday, the Fed will likely announce
that it will reduce its monthly bond purchases at
twice the rate that Powell had outlined just six
weeks ago. Those bond purchases are intended
to lower longer-term rates, so winding them
down more quickly — likely by early spring —
will lessen some of the economic aid the Fed
supplied after the pandemic erupted last year.
Fed officials are also expected to forecast that
they will raise their benchmark short-term
rate, which has been pegged near zero since
March 2020, two or three times next year. Rate
hikes would, in turn, increase a wide range