每日英語跟讀 Ep.K278: Fed will tighten credit faster and sees 3 rate hikes in 2022
The Federal Reserve (Fed) will quicken the pace at which it’s pulling back its support for the economy as inflation surges, and it expects to raise interest rates three times next year. In a sharp policy shift, Fed Chair Jerome Powell announced Wednesday last week that it will shrink its monthly bond purchases at twice the pace it previously announced, likely ending them altogether in March.
The accelerated timetable puts the Fed on a path to start raising rates in the first half of next year. The Fed’s new forecast that it will raise its benchmark short-term rate three times next year is up from just one rate hike it had projected in September. The Fed’s key rate, now pinned near zero, influences many consumer and business loans, including for mortgages, credit cards and auto loans.
The shift reflects Powell’s acknowledgement that with inflation pressures rising, the Fed needed to begin tightening credit for consumers and businesses faster than he had thought just a few weeks earlier. The Fed had earlier characterized the inflation spike as mainly a “transitory” problem that would fade as supply bottlenecks caused by the COVID-19 pandemic were resolved.
The run-up in prices has persisted longer than the Fed expected and has spread from goods like food, energy and autos to services like apartment rents, restaurant meals and hotel rooms. It has weighed heavily on consumers, especially lower-income households and particularly for everyday necessities, and negated the higher wages many workers have received.
He acknowledged the possibility that inflation won’t decline as expected next year. As a result, the Fed is shifting its attention away from reducing unemployment, which has fallen quickly to a healthy 4.2 percent, down from 4.8 percent at its last meeting, and toward reining in higher prices. Consumer prices soared 6.8 percent in November compared with a year earlier, the US government said last week, the fastest pace in nearly four decades.
The Fed’s policy change does carry risks. Raising borrowing costs too fast could stifle consumer and business spending. That, in turn, would weaken the economy and likely raise unemployment. Yet if the Fed waits too long to raise rates, inflation could surge out of control. It might then have to act aggressively to tighten credit and potentially trigger another recession.
聯準會的政策改變確實存在風險。過快提高借貸成本可能會扼殺消費者與企業的支出，因而削弱經濟，並可能使失業率攀升。但若聯準會遲遲不升息，通貨膨脹便可能失控；然後聯準會也許就不得不採取嚴厲措施緊縮信貸，而這可能又會再引發一場經濟衰退。Source article: https://www.taipeitimes.com/News/lang/archives/2021/12/21/2003769913