The Fed’s Pivot: Jerome Powell’s abrupt change of course moved the central bank into inflation-fighting mode.Inflation, Explained : What is inflation, why is it up and whom does it hurt? We answered some common questions.Powell, did not explicitly endorse a faster tapering process, saying that “there’s a lot to learn and digest and think about coming up to the next meeting.” Williams, who is vice chair of the Fed’s policymaking Open Market Committee and is a top adviser to Mr. Powell indicated on Tuesday that the central bank could wrap up its bond-buying more quickly. In November, officials announced plans to wind down that program gradually through the end of the year and the first half of 2022, a process known as “tapering.” But Mr. The Fed had been buying $120 billion in government-backed securities each month throughout much of the pandemic to bolster the economy by keeping money flowing in financial markets. Powell, the Fed chair, signaled on Tuesday that the central bank could move to withdraw economic support more quickly than it initially expected and suggested that such a decision could come as soon as the Fed’s December meeting. Williams’s comments are the latest indication that policymakers are growing more concerned about inflation and are weighing how to respond. That, he said, would “mean a somewhat slower rebound overall” and “also does increase those inflationary pressures, in those areas that are in high demand.” He later added that a risk with the new variant is that it “will continue that excess demand in the areas that don’t have capacity, and will stall the recovery in the areas where we actually have the capacity.” “Clearly, it adds a lot of uncertainty to the outlook,” Mr. But if the new version of the virus leads to another wave of infections, it could exacerbate the disruptions that have caused prices to rise at their fastest pace in three decades. Williams said Tuesday in an interview with The New York Times. It is still too soon to know how the Omicron variant, which public health officials in southern Africa identified just last week, will affect the economy, Mr.

Williams, president of the Federal Reserve Bank of New York, said the latest variant of the coronavirus could prolong the bottlenecks and shortages that have caused inflation to run hotter than expected, and is a risk Fed officials will assess as they “grapple” with how quickly to remove economic support.

Burst taper