The minutes of the Fed's meeting this month show growing support for the tapering program to be completed more quickly.
On Thursday (25/November), the US central bank released the minutes of its November meeting indicating strong support for accelerating the completion of the tapering program.
It is the latest indication of anxiety from policymakers over the surge in US inflation in recent months.
Initially, the Fed's officials did not really respond to the increase in US inflation that occurred in the spring and summer of this year.
However, inflation that continued to rise throughout the fall into winter has kept its levels consistently near multi-year highs.
This is what underlies Fed officials to strengthen support for more aggressive monetary policy tightening.
"Many participants (the Fed meeting) want the policy-making committee to be prepared to adjust the pace of asset purchases and increase interest rate targets more quickly than previously anticipated, if future inflation continues to run higher than current levels," said the minutes of the Fed meeting. last night.
The plan to accelerate tapering was not fully supported by all FOMC members; some officials are still advocating a more patient approach while waiting for more US economic data to be released.
However, the solid US economic data over the past three weeks has made the discourse to accelerate the tapering program more acceptable.
The President of the San Francisco Fed, Mary Daly, also said she was open to plans for a faster tapering if the employment sector and inflation data remained stable.
In fact, she has been known as the Fed's most careful official.
US Dollar Strengthening Unstoppable
After the announcement of the very hawkish minutes of the Fed's meeting, the US Dollar Index (DXY), which is a measure of the dollar's strength against six other major currencies, jumped to the range of 96.83.
This is because the plan for a faster completion of tapering has pushed expectations of a Fed rate hike next year.
The latest data from the CME Group's FedWatch shows investor projections of 53 percent for the May 2022 rate hike, an increase from the level of optimism before the release of the minutes which was still around 45 percent.
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