Fed flags rate hike 'soon', plans for significant balance sheet reduction

Central bank signals likely to raise rates in March; stocks slide into negative territory after Powell remarks

The Federal Reserve on Wednesday signaled it is likely to raise US interest rates in March and reaffirmed plans to end its bond purchases that month as well before launching what was characterized as a significant reduction in its asset holdings.

The combined moves will complete the Fed's pivot away from the loose monetary policy that has defined the coronavirus pandemic era and toward a more urgent fight against inflation.

Fed Chair Jerome Powell, speaking in a news conference after the end of a two-day policy meeting, said the U.S. central bank will be open-minded as it adjusts monetary policy