As there are no plans for a fourth stimulus check, no announcement has been made as to its end. There have already been three stimulus checks, but they were independent of the Federal Reserve. What the bank has done is support mortgages and businesses by pumping hundreds of billions of dollars into the economy every month since the start of the pandemic.
However, the Fed has said it is beginning to phase out payments to the US economy. reducing funding by $15 billion per month. On Wednesday, they would cut that stimulus by $15 billion a month, but leave interest rates unchanged.
Interest rate hike put on hold by world banks
A hike in interest rates to curb inflation has long been expected, but Powell says there are other factors at play that higher interest rates won’t solve, such as the chaos in global supply chains. It expects this problem to persist until the second half of 2022.
“We don’t think it’s time to raise interest rates yet. There is still ground to cover to maximize employment,” he said. Fed chief Jerome Powell said, adding that he thought that target might be reached by the end of next year. In the meantime, expect high prices for goods.
This attitude has been repeated by other central banks such as the Bank of England (BoE) and the European Central Bank (ECB). The BoE said Thursday it would keep its interest rates at the same level, while the ECB said it would not raise rates until April 2022. This follows previous pandemic plans to keep borrowing costs low to encourage people to spend. Countries in Europe are starting to see cases of Covid-19 on the rise, while the UK hasn’t had tens of thousands of cases in months.
The Fed also argues that a rate hike would now prevent people from returning to work in the US workforce, which has higher than normal unemployment rates and record job openings. Unemployment is 4.8 percent while there are more than 10 million vacant jobs.