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The Federal Reserve indicated Wednesday that it will begin making aggressive policy moves in an effort to combat rising inflation, according to CNBC.

What it’s doing: “For one, the central bank said it will accelerate the reduction of its monthly bond purchases. The Fed will be buying $60 billion of bonds each month starting in January, half the level prior to the November taper and $30 billion less than it had been buying in December. The Fed was tapering by $15 billion a month in November, doubled that in December, then will accelerate the reduction further come 2022.”

• Afterward, in late winter or early spring, the Fed will likely begin raising interest rates.

Inflation outlook: The Federal Open Market Committee raised its inflation outlook for 2021 from 4.2% to 5.3% for all items and from 3.7% to 4.4% excluding food and energy.
 

• “For 2022, the expectation is now 2.6% for headline and 2.7% for core, both up from September.”

Economic growth forecast: The committee reduced its prediction for economic growth in 2021 and now sees GDP rising 5.5% for the year rather than the previously indicated 5.9%. It also sees 2022 growth rising 3.8% rather than 4.0% and 2023 growth increasing 2.2% instead of 2.5%.

No more “transitory”: “For the Powell Fed, tightening policy now marks a dramatic pivot off a policy enacted just over a year ago. Known as ‘flexible average inflation targeting,’ [the policy] meant it would be content with inflation a little above or below its long-held 2% target.”