While testifying before the U.S. Senate Banking Committee, the Federal Reserve's Chairman Jerome Powell said that the U.S. central bank is likely to normilze its policy this year. He added that he thinks that the Fed will end its asset purchases in March, hike rates over the course of 2022, and allow balance sheet to run off later in the year. Then, however, Powell stressed, that the Fed has not decided on a timeline for any of the normalization processes.
He also noted that price increases are due to supply constraints and new demand, adding that tools will be used to bring inflation back down. Over time inflation will subside, but the question is how fast, Powell said.