Atlanta Fed President Raphael Bostic said with growth surging to an estimated 7% this year and inflation well above the Fed's 2% target, he now expects interest rates will need to rise in late 2022. That marked a decisive shift from the end of 2020, when 12 Fed policymakers felt that crisis levels of interest rates would need to remain in place into 2024. The difference in the meantime: Vaccines that have driven back the spread of the coronavirus, and an economic reopening that has proceeded faster, and driven inflation higher, than Fed officials anticipated. How quickly that happens, however, may influence the Fed's upcoming decisions about when to begin reducing its $120 billion in monthly bond purchases, and eventually raise interest rates. Boston Fed President Eric Rosengren said on Wednesday that he expects inflation to come down and be slightly above 2% going into next year.

Source: The Edge Markets June 23, 2021 18:00 UTC