Federal Reserve to cut back on pandemic stimulus amidst rapid inflation

The Fed announced in a Tuesday statement following the conclusion of their two-day meeting that they will be slashing their monthly purchases by twice as much as they had announced last month, according to The New York Times.

The slow down in buying would reportedly put them on track to end the program in March.

"In light of inflation developments and the further improvement in the labor market, the Committee decided to reduce the monthly pace of its net asset purchases by $20 billion for Treasury securities and $10 billion for agency mortgage-backed securities. Beginning in January, the Committee will increase its holdings of Treasury securities by at least $40 billion per month and of agency mortgage-backed securities by at least $20 billion per month," the statement said.

The ending of the bond buying "will position the central bank to more promptly raise its policy interest rate… if officials decide that doing so is necessary to keep inflation under control," wrote The New York Times.

The economic projections from the Fed suggest that officials will make a three percent interest rate increase next year.

"With inflation having exceeded 2 percent for some time, the Committee expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee's assessments of maximum employment," the Fed said.

The news comes after it was revealed last week that inflation rose 6.8 percent in November from the year prior. The consumer price index rose 0.8 percent in a one month period, following a 0.9 percent jump in October.