The Federal Reserve announced a move to quickly pare back its bond-buying policy as officials become worried about the persistence of inflationary pressures.
Source: Federal Reserve
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On Wednesday, the policy-setting Federal Open Market Committee stated it would double the rate of winding up of its asset purchase program.
The FOMC also indicated a strong possibility of an interest rate hike next year that would be the first hike since the Fed cut short-term borrowing costs to close to zero in March 2020.
The Fed has added trillions of dollars in US Treasuries and agency mortgage-backed securities (MBS) to indicate its support for financing conditions.
In a statement, FOMC indicated that the committee decided to reduce the monthly pace of its net asset purchases by $20 billion for Treasury securities and $10 billion for agency mortgage-backed securities.
A quicker taper would allow the Federal Reserve to move quicker and more aggressively on interest rate hikes.