TAMPA, Fla. (WFLA) — The Federal Reserve, the central bank of the United States, is expected to end its stimulus efforts earlier than originally planned and increase interest rates three times in 2022. The changes come as the Federal Open Market Committee works to address ongoing record 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 FOMC wrote in a statement. As a result, the committee will reduce its spending per month on net asset purchases by $20 billion for Treasury securities and $10 billion for agency mortgage-backed securities.

The tapering off of stimulus purchases and promised rate hikes for 2022 are aimed at allowing the Federal Reserve to “foster smooth market functioning” and support “the flow of credit to households and businesses” amid ongoing inflationary pressures.

“Beginning in January, the Committee will increase its holdings of Treasury securities by at least $40 billion per month and of agency mortgage‑backed securities by at least $20 billion per month,” FOMC wrote.

The vote for these changes was unanimous among the committee members, led by newly reappointed Federal Reserve Chair Jerome Powell. The chair announced the changes at a news conference and noted that the ongoing supply chain problems have led to higher price increases.

The FOMC’s economic projections included three potential interest rate hikes in 2022, starting in May 2022 according to CME Group’s FedWatch tool. The 2022 median federal funds rate would make the benchmark interest rate clock in at 0.9%. The previous expectation in September’s projection was 0.3%.

The Federal Reserve set its inflation goal to return rates to a 2% inflation rate, rather than the current 6.8% seen nationally. Should more fluctuations occur, the FOMC will consider additional changes.

“The Committee judges that similar reductions in the pace of net asset purchases will likely be appropriate each month, but it is prepared to adjust the pace of purchases if warranted by changes in the economic outlook,” according to FOMC’s announcement.