<Anchor> When the
corona situation worsens like this, more money is usually released to stimulate the economy, but rising prices are more burdensome to the economy than the recession. Because of this, the US Federal Reserve has decided to further reduce the amount of money it is putting into the market to keep up with inflation, and it also hinted that it could raise interest rates next year.
Correspondent Kim Jong-won from New York.
<Reporter> The
Federal Reserve has no longer used the term 'temporary' for inflation.
Until last month, the position was that the US inflation did not significantly exceed the long-term target of 2%, but today (16th) was different.
[Jerome Powell/Federal Reserve Chairman: Inflation across the economy has surpassed our long-term target of 2%. This situation is likely to continue next year.]
Accordingly, we have turned to a hawkish policy that is significantly different from the previous one.
First of all, we have decided to end the purchase of assets to release money in the market by March next year.
He also announced that it would double its asset purchase cuts from the current $15 billion per month to $30 billion per month.
The Fed again left interest rates unchanged at the current zero level, but has predicted that it will raise rates at least three times next year.
As inflation continues to exceed the target of 2% and the labor market once again confirms that it will raise interest rates when full employment is reached, it is expected that interest rates will rise from 0.8% to 1% next year.
The New York Stock Exchange, which started as a bear market, rose at the same time after the announcement of the Fed.
Markets are breathing a sigh of relief that today's Fed announcement came as expected and no stronger action came.