Fed will likely pave the way for a March rate hike at the key meeting this week

 The Federal Reserve is scheduled to announce the first rate increase in the past three years at an important two-day meeting this week, which could lead to a liftoff in March as policymakers attempt to tackle the most intense inflation rate in the past four decades.

There is a broad consensus by central bank officials to start with a more aggressive normalization process amid increasing concerns over the rapid rise in the cost of living which climbed by 7% in December The Labor Department said earlier this month. It was the highest pace of inflation since 1982 because of an acute shortage of goods caused by congestion in ports as well as other disruptions due to pandemics throughout production chain. SURGING INFLATION TAKES HOLD IN MOUNTAIN STATES, WITH RATES NEAR 9% The Fed has begun to reduce it's bond buying program in the month of November, reducing them to $15 billion per month and also announced at the December session that they will triple that to $30 billion by January. In the next few months the central bank is expected to end the program in March, which would allow Fed officials to start increasing rates of interest and reduce its $8.8 trillion of balance sheets. Chairman Jerome Powell said earlier this month, while appearing in front of Senate Banking Committee. Senate Banking Committee. The majority of economists anticipate the Fed to increase rates four times in the coming year. Economic projections from the December meeting indicate that the Fed expects rates to be 0.9 percent by in 2022's end, 1.6% at the end of 2023, and 2.1 percent at the close of 2024. The market is already pricing in more than 90% chance of an increase in the rate at the Fed's mid-March meeting and about 65% of the chance of four rate hikes throughout the year in accordance with CME Group. CME Group, which tracks the trading.

Certain economists believe that the Fed delayed too long in deciding to address the soaring inflation. Others have expressed worries that the Fed's speedy move to bring prices down could result in slowing hiring, and could leave many workers, especially lower-income Americans with no job. The hike in interest rates can increase the cost of consumer or business credit, which can slow the economy as employers are forced to reduce their spending.