The Federal Reserve will announce its latest interest rate decision at 2: 00 a.m. Beijing time on November 4, followed by a press conference by Powell. The Fed is widely expected to formally announce its plan to scale back its bond purchases (taper) at its meeting this week.

In fact, Powell has said that the Fed will soon begin to scale back its bond purchases, but will not rush to raise interest rates.

Morgan Stanley expects the Fed to announce that it will scale back its bond purchases from November 15, and formally admit that inflation has lasted longer than the Fed expected. Morgan Stanley said: "the statement may list the reduction plan and stress that it is flexible."

It is widely believed that the Fed will not raise interest rates at this week's meeting.

However, given that US inflation remains stubbornly high, economists at Goldman Sachs Group expect the Fed to raise interest rates for the first time in July next year, a full year earlier than previously expected, and again in November 2022, and twice a year thereafter.

Tim Duy, chief US economist at SGH Macro Advisors, expects the Fed to raise interest rates as early as the third quarter of next year. "delaying the rate hike until the first half of next year may require really disturbing inflation data," he said in a recent report. "

It is reported that the core PCE price index in the United States rose 3.6% in September from a year earlier, and is expected to be 3.7%, with a previous value of 3.6%, which continues to be the highest since 1991. While inflation is high, corporate employment costs are growing at their fastest pace in two decades.

While Fed officials have been urging people for some time to be patient and see how inflation and employment unfold, some economists believe Fed officials could risk a repeat of runaway inflation in the 1960s, when the Fed waited too long, causing wage inflation to spiral for a decade.

"We may touch on the employment issue sooner than people expect," said Ethan Harris, head of global economic research at Bank of America Securities. "the risk of significantly exceeding the Fed's 2 per cent inflation target has greatly increased."

Still, on the labour market, the Fed faces mixed signals. The number of job openings (10.4 million in August) is high, but the unemployment rate is still 4.8 per cent, up from 3.5 per cent before the epidemic. Powell pointed out that compared with before the epidemic, there are still 5 million fewer jobs.