The Federal Reserve is expected on Wednesday to announce that it is speeding the end of its pandemic-era bond purchases and signal a turn to interest rate increases next year as a guard against surging inflation.

       The identification of the Omicron coronavirus variant last month has added a new level of uncertainty for US central bank officials who, after steadily discounting the impact of the pandemic on the economy's performance, must now assess how the new strain’s faster spread may influence consumers, businesses, and the path of growth and inflation.

       Private forecasters polled by Reuters still expect US GDP growth of nearly 4 per cent next year, well above trend, and are aligned around expectations the Fed’s increased concern about inflation will cause it to pull the plug on its bond-buying program —originally set at $120 billion per month —in March and pencil in multiple rate increases for 2022.

       The Fed is due to issue a new policy statement along with updated economic projections following the end of its latest two-day meeting.

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