WASHINGTON–When the Federal Reserve’s Open Market Committee (FOMC) adjourns its two-day meeting today, it is expected to do so by increasing rates by a quarter-point.
But what had been expected to be a simple series of steps in 2022 to tame inflation has now been made much more complicated by the Russian attack on Ukraine.
Nevertheless, with inflation soaring, the Fed is almost certain to act, according to analysts.
"The economic outlook supports the Fed's current plans to boost the federal funds rate in March and to begin to reduce their balance sheet over the summer," stated David Kelly, chief global strategist for JPMorgan Funds. "However, there [are] a number of areas of uncertainty which should make them a little more cautious in tightening."
The Fed has long signaled it will make the 25 basis point increase at its meeting this month, even as some had pushed for a 50 BP increase. What is less certain is how often the Fed will act to push rates higher this year, due to a series of economic complications.
In addition to increasing rates, the Fed is also expected to make adjustments to the economic outlook, projections for the future path of rates, and likely a discussion about when the central bank can start reducing its bond portfolio holdings, according to CNBC.
The Fed is also expected to announce it will wind down its bond-buying program this month.