Washington (AP) — Many parts of the country suffered supply chain disruptions and labor shortages in November, the Federal Reserve Board reported Wednesday.
In a national economic survey, the Fed’s 12 regional banks found that the economy continued to grow at a moderate to moderate pace, and the outlook for future growth remained bright.
However, some Fed business people have expressed uncertainty about when supply chain bottlenecks and the problems posed by labor shortages will begin to alleviate.
Price increases are reported to be widespread throughout the economy, partly due to supply chain issues.
The Fed’s report, known as the Beige book, said “there was a widespread increase in input costs due to strong demand for raw materials, logistics challenges and tight labor markets.”
Last month, the Fed’s investigation, based on interviews with business people in all of the Fed’s 12 regional banking districts, laid the foundation for discussions when central bank officials hold their final meeting this year on December 14-15. To do.
In this week’s parliamentary testimony, Federal Reserve Chair Jerome Powell is ready to accelerate the pace of the recession in monetary easing policies that central banks have used to support the economy for the past two decades. Stated.
The Federal Reserve has been buying $ 120 billion in government bonds and mortgage-backed securities since spring 2020. At a meeting last month, the central bank announced that it would begin to reduce these purchases, which would help keep long-term interest rates low. $ 15 billion in November and another $ 15 billion in December.
According to Powell’s comment this week, the Fed will make significant monthly cuts in the future at its December meeting to allow full bond purchases to be completed earlier than the expected end date of June. May be announced to do.
This paves the way for the Fed to start raising benchmark rates. Benchmark interest rates were reduced from a record low of 0% to 0.25% in early 2020.
Both the end of bond purchases and the start of rate hikes are expected to increase consumer and corporate borrowing costs as a way to slow the economy and combat inflationary pressures.
Powell commented that inflation surged to a 30-year high. This was mainly due to the limited supply of pandemics during periods of high demand due to the resumption of the economy.
A Fed study found that supply chain shortages are pushing up inflation. WGN Radio 720
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