A growing number of Federal Reserve officials and Wall Street economists are opening the door to more than the forecast three interest rate rises this year as the US central bank strives to stamp out soaring inflation.
Senior policymakers and private sector forecasters have laid the groundwork for “lift-off” of the main policy rate from zero as early as the March policy meeting. They cite fresh evidence that inflation — running at its highest pace in nearly 40 years — is broad and rising, and further signs that the labour market is rapidly recovering.
But in the past week — during which Jay Powell, the chair, said inflation poses a “severe threat” to the economic recovery — support has mounted for the Fed to move more aggressively after that point.