JANUARY 31, 2022 – FED SET ON RAISING RATES IN MARCH
With consumer prices increasing at a 7 percent annual rate, the Federal Reserve said last Wednesday it is looking to lift interest rates in March, and reaffirmed plans to end its bond purchases that month, in an attempt to tame inflation.
“The committee is of a mind to raise the federal funds rate at the March meeting assuming that the conditions are appropriate for doing so,” Powell said during a news conference. Any additional interest rate increases and an eventual reduction in the Fed’s asset holdings would follow as needed, Powell said, while officials monitor how quickly inflation falls from current highs back to their 2 percent target.
The pace of subsequent rate hikes or how quickly officials will let its massive balance sheet decline was not defined. Powell says with inflation high and for now apparently getting worse, they will steadily clamp down on credit and end the support provided to the economy during the pandemic.
We suggest you take the time to review your future financing plans and take advantage of the favorable conditions available before interest rates start to move up, perhaps multiple times, this year.