The Federal Reserve plans to finish its tapering of its pandemic-era stimulus purchases by March to make room for three targeted interest-rate hikes in 2022 to combat rising inflation.

The policy featured billions of dollars in monthly asset purchases by the central bank.

When the taper was announced on Nov. 3, the Fed projected a timetable that saw the purchases gradually contract each month.

Speaking before the Senate Banking Committee on Nov. 30, Fed Chairman Jerome Powell acknowledged that inflation was outpacing expectations and that the Fed would consider ending its taper sooner.

At three unspecified points in 2022, the Fed expects to initiate separate quarter-percentage-point interest-rate cuts that will conclude by the end of next year.

Previously, Powell and other Fed officials had been coy about announcing when it would move interest rates from their current rock-bottom levels. Speculation has mounted for weeks that the Fed would act sooner than it planned to raise rates as inflation continued to go higher.

Dan North, a senior economist at Euler Hermes North America, predicted that the Fed would move in this direction after Powell's comments before the Senate at the end of November.

North added that markets were pricing in rate hikes for 2022.

"The market is now pricing in two rate hikes in 2022, starting in the middle of the year," North told International Business Times. "But will inflation, driven by supply chain shortages, wages and overflowing monetary and fiscal policy, force the Fed’s hand even earlier?"

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