Fed begins meeting to fight inflation as markets tremble
The Marriner S. Eccles Federal Reserve building in Washington, Jan. 25 / AFP-Yonhap
The Federal Reserve began a policy meeting Tuesday (local time) in which central bankers are expected to further signal which tools they plan to use against inflation and when, amid a selloff on Wall Street.
A central bank spokesperson confirmed the beginning of the policy setting Federal Open Market Committee's (FOMC) two-day meeting, which will conclude Wednesday with a committee statement and press conference by Fed Chair Jerome Powell that will be closely followed for signs of what the Fed plans to do to address a surge in U.S. prices.
Fears of tighter Fed policy have gripped Wall Street in recent sessions, which saw indices decline throughout last week and end with slight gains in Monday's trading after a session in which indices sank deep into negative territory before rebounding.
The Dow, SP 500 and Nasdaq were all again in the red in Tuesday morning trading, as investors digested a lower global growth forecast from the IMF while waiting for the latest from the Fed.
After cutting its lending rate to zero and pledging to keep it there for longer to ensure the economic recovery includes marginalized groups, the central bank is pivoting to quell inflation after U.S. consumer prices rose 7 percent last year.
It is on track to end its program of buying bonds to stimulate the economy by March and then hike rates. Central bankers' individual forecasts released at the December meeting predicted up to three rate hikes this year.
The FOMC's statement after the meeting and Powell's press conference will be closely followed for signs of any deviation from that plan, including the possibility of more aggressive moves against inflation, or signals of hesitation as the Omicron variant of COVID-19 hits business activity again. (AFP)