The Federal Open Market Committee said that with inflation well above 2% and a strong labor market, it expects it will soon be appropriate to raise the target range for the federal funds rate in its January 2022 meeting statement.
The Federal Reserve noted that job gains have been solid in recent months, and the unemployment rate has declined substantially. Supply and demand imbalances related to the pandemic and the reopening of the economy have continued to contribute to elevated levels of inflation.
The path of the economy continues to depend on the course of the virus and new variants. However, progress on vaccinations and an easing of supply constraints are expected to support continued gains in economic activity and employment as well as a reduction in inflation.
The Committee kept the target range for short-term interest rates near zero and will further slow its bond buying. It will monitor conditions as the economy continues to strengthen and adjust the stance on monetary policy if needed.
What does this mean for you? Let’s rewind.
January 2022 FOMC Rewind
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The views expressed here do not necessarily reflect the views of the management of the Federal Reserve Bank of San Francisco or of the Board of Governors of the Federal Reserve System.