Fed To Accelerate Withdrawal Of Economic Aid As Prices Surge

The video discusses the Federal Reserve's decision to accelerate the reduction of its bond-buying program, initially used as a pandemic stimulus. This decision is driven by a strengthening labor market and persistent inflation pressures, partly due to prolonged supply chain issues. The committee plans to double the pace of reductions, with expectations to cease asset purchases by mid-March. Ending the bond-buying program sooner allows the Fed to focus on raising policy interest rates, with potential rate hikes in 2022 to manage inflation.

Why is the Federal Reserve accelerating its bond-buying reduction?

• Due to a strengthening labor market and inflation pressures

• To reduce government spending

• To increase unemployment

• To decrease inflation

What decision did the committee make regarding asset purchases?

• To halt asset purchases immediately

• To maintain the current pace of asset purchases

• To double the pace of reductions in asset purchases

• To increase asset purchases

By when does the Fed anticipate ceasing increases in securities holdings?

• By mid-March

• By the end of 2022

• By early November

• By the end of 2023

What traditional tool does the Fed plan to return to after ending the bond-buying program?

• Implementing wage controls

• Lowering taxes

• Increasing government spending

• Raising policy interest rates

How many rate hikes did the Fed suggest could occur in 2022?

• Four

• Three

• Two

• One