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Jerome Powell warned that higher inflation justifies an accelerated winding down of bond purchases.

US Federal Reserve Chairman Jerome Powell said on Tuesday that at its December meeting, the central bank will consider accelerating the pace of asset purchases amid high inflation and concerns over economic overheating, writes DJ Newswires.

“The risk of rising inflation has increased. It's time for the Fed to stop talking about accelerating inflation as a temporary phenomenon, ”Powell said at a Senate Banking Committee hearing, where Treasury Secretary Janet Yellen also spoke.

If the Fed decides to cut purchases by $ 30 billion a month, the program will end in March, giving the central bank more flexibility in terms of potential interest rate hikes in the first half of 2022.

Omicron scared the Fed: the US Central Bank will accelerate the tightening of policy, writes finanz.

Powell said the emergence of a new omicron variety creates "additional uncertainty about inflation" and could "exacerbate supply chain problems," while reducing people's willingness to work face-to-face and slowing labor market recovery.

In this regard, the Fed at its next December meeting may consider postponing the date of withdrawal from stimulus measures by several months.

After Powell's hawkish comments, the likelihood of a federal funds rate hike in July 2022 was again predicted with 100% probability, although it was estimated at 58% in the daytime. The likelihood of a June rise jumped to 80%.

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