July 28, 2021—The Federal Reserve will meet this week to discuss a possible dialing back of its "ultra-low" interest rate policies.
As the U.S. economy continues to see brisk and sustained growth, the Associated Press reports the Fed's policymakers may be more inclined to pull back on some of its more intense COVID-19 measures. Though the low interest rates have encouraged spending—consumer prices jumped 5.4 percent in June—inflation rates have risen to an "uncomfortable" level, which some economists suggest could "erode the value of recent pay raises" and ultimately undermine a lot of the economic recovery progress that has been made.
Fed Chair Jerome Powell has said that the central bank wants to see “substantial further progress” toward its goals of maximum employment and price stability before it would consider reducing the bond purchases.
