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Federal Reserve officials will use their first meeting of 2022 in ten days to lay the groundwork for moving away from their very-easy money stance during the pandemic toward more normal policy.

Officials have now gone silent for about two weeks as usual ahead of a meeting in order to prepare for their interest-rate setting gathering.

In a flurry of speeches over the past two weeks, hawks and doves at the central bank seem aligned about the way forward. U.S. inflation is too high, the unemployment rate is below its neutral rate, and economic momentum should be strong once the coronavirus omicron wave is passed.

See: Fed’s Harker sees ‘fair amount of tightening’ this year

“We have heard from a lot of officials at this point. There seems to be broad agreement that they’re going to raise rates in March,” said Matthew Luzzetti, chief U.S. economist at Deutsche Bank, in an interview. “There is broad agreement that quantitative tightening should start not long after they start raising rates,”

“The most important discussion point at the January meeting will be further guidance about the timeline for starting quantitative tightening and the possible monthly drawdown that we can expect,” Luzzetti said.

They will want to get close to final decisions on these issues, he added.

The Fed will still be buying Treasury bonds and mortgage-backed securities until mid-March.

Fed officials this week threw wet blankets on speculation by some economists that the central bank would decide to suddenly end its asset purchases in January.

At a speech on Friday, New York Fed President John Williams gave every indication that the Fed will stick to the timeline for the tapering of bond purchases adopted in December “and not end quantitative easing early in January even as it prepares to raise rates in March,” said Krishna Guha, vice chairman of Evercore ISI, in a research note.

See: Fed’s Williams sees inflation subsiding this year aided by a slowdown in growth

Deutsche Bank’s Luzzetti thinks the Fed will announce the shrinking of the balance sheet in July.

He expects the Fed will initially allow $20 billion of Treasurys and $15 billion of mortgage-backed securities to run off each month and ramp those monthly drawdowns to $60 billion and $45 billion by the end of the year.

The Fed will also allow all the Treasury bills on its portfolio to run off, he said. All told, that is a reduction of $560 billion this year. A rule of thumb from the last tightening cycle in 2017 suggests that is equivalent to about 3 quarter-point fed funds rate hikes but that is a rough estimate, Luzetti said.

During the pandemic, the Fed doubled its balance sheet to roughly $8.8 trillion.

The highest U.S. inflation readings in 40 years and a steady decline in the unemployment rate have forced the Fed to pivot away from the easy policy stance in place since early 2020 when the pandemic struck.

Oren Klatchkin, economist at Oxford Economics, sees four quarter-point rate hikes this year and the start of balance sheet reduction by mid-year.

He said there will be a winter economic soft patch from spiking omicron cases but said activity will return in the spring. This year should still see “solid” economic growth, he added. U.S. GDP likely grew above a 5% rate in 2021, the fastest pace in 30 years, economists said.

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