America’s central bank has announced it’ll begin tapering its monthly bond purchases with the intention to end them next year.

That marks a formal change in policies that brought in by the U.S. Federal Reserve Board in March last year to deal with the massive layoffs caused by the pandemic.

But the Fed also continues to believe high inflation would prove ”transitory” and likely not require a fast rise in interest rates.

The bank plans to leave its key overnight rate near zero until inflation had hit 2 per cent and was ”on track to moderately exceed 2 per cent for some time.”

In a statement at the end of a two-day meeting, the Fed did little to indicate when it might start the next phase of policy ”normalization” by raising rates.