(Federal Reserve) The Federal Reserve’s minutes for December 14-15 have revealed that officials target to raise short-term rates earlier than expected.
The hawkish stance by the central bank officials reflects concerns over rising inflation and a tight labor market.
Some Fed officials also call for the tapering of the $8.76 trillion bonds and other assets after the central bank starts rate hike.
Analysts, including Renaissance Macro’s economist Neil Dutta, are now projecting that the rate hike could come in March, earlier than June, as the central bank rushes to cool the economy.
The projected early rate hike is a shift from the previous view by several Fed officials that the 2021 price pressures were caused by supply chain issues and could ease gradually.
Officials are now convinced that they have met the criteria for hiking rates, including a satisfaction that if current hiring continues, maximum employment would be achieved.
The Fed’s hawkish comments caused a rout in global stocks, with Dow Jones Industrial Average shedding 1.1%, while Nasdaq plunged 3.3%
NASDAQ 100 is currently is down -3.12%, DXY is up +0.10%.
