The Federal Reserve is positioning to raise interest rates at least three times next year in response to high inflation.

Officials at the central bank issued projections Wednesday signaling the rate hikes, a faster pace than investors had expected. In a statement, the officials also said that they would begin scaling back their massive monthly bond purchases by $30 billion, meaning that the program is set to end early next year, months earlier than planned.

Together, the actions indicate that the Fed is trying to move faster to tighten monetary policy to limit inflation.

"Supply and demand imbalances related to the pandemic and the reopening of the economy have continued to contribute to elevated levels of inflation," the Fed officials said in a statement. "In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook."

The central bank had previously said that it would only raise rates after two criteria are met, the first being inflation running over 2% — which is has been for months — and the second is full employment — the United States is still millions of jobs short of where it was prior to the COVID-19 pandemic.

Wednesday’s news from the Fed, led by Chairman Jerome Powell, represents a change of course for the central bank, which has resisted raising interest rates. Some economists and Republicans have said that the Fed should have already raised rates, given higher prices throughout the year.

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After the Fed’s last monthly meeting in November, Powell announced that the central bank would start reducing its monthly purchases of $120 billion in Treasury bonds and mortgage-backed securities, a process known as tapering and the first step toward raising interest rates.

During testimony before the Senate Banking Committee last month, Powell indicated that the tapering process might end up being sped up in light of the rising costs of goods. He also said it was time to retire the word “transitory” to describe inflation, a term that he and Biden administration officials have used to push back on those who argued inflation would be persistent.

Consumer prices increased 6.8% for the year ending November, according to a report released by the Bureau of Labor Statistics, the fastest pace of inflation in 39 years. The high inflation is largely being driven by skyrocketing energy costs, which are up more than 30% year-over-year, although other areas of the economy, including food production, are also experiencing higher prices.

The November jobs report was also worse than expected, adding further concern about the country’s economic trajectory. The economy added just 210,000 new jobs in November, far fewer than the half-million expected.

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Powell, a Republican, was recently renominated by President Joe Biden to serve another term at the head of the central bank. It was reported Tuesday that in a nod to the liberal wing of his party, Biden is considering former Ohio Attorney General and Consumer Financial Protection Bureau Director Richard Cordray to be the Federal Reserve’s top banking regulator.