Washington, Dec 16 : The US Federal Reserve announced a faster tapering of the central bank's asset purchase program beginning in January amid the rising 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 Federal Open Market Committee (FOMC), the bank's policy-making committee, said in a statement on Wednesday after a two-day policy meeting. "In light of inflation developments and the further improvement in the labour market," the committee decided to reduce the monthly pace of its net asset purchases by $20 billion for Treasury securities and $10 billion for agency mortgage-backed securities, starting with the mid-January purchase schedule, reports Xinhua news agency. "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," the statement said. Early last month, the Fed had agreed to reduce its monthly asset purchase program of $120 billion by $15 billion. The announcement on Wednesday put the central bank on track to end asset purchases by March, earlier than initially expected of June. "We are phasing out our purchases more rapidly because with elevated inflation pressures and a rapidly strengthening labor market, the economy no longer needs increasing amounts of policy support," Fed Chairman Jerome Powell said on Wednesday afternoon at a virtual press conference. "In addition, a quicker conclusion of our asset purchases will better position policy to address the full range of plausible economic outcomes." Over the past several weeks, some Fed officials and economists have urged the central bank to accelerate the pace of tapering to give more leeway to raise rates sooner amid inflation pressures. The consumer price index (CPI) rose 6.8 per cent in November from a year earlier, the fastest annual pace in almost 40 years, according to the Labour Department. Fed officials' median interest rate projections released on Wednesday showed that the central bank could raise the benchmark interest rate three times next year, up from just one rate hike projected in September. Fed officials also expected the US economy to grow at 5.5 per cent in 2021, lower than 5.9 per cent estimated in September. The Fed has pledged to keep the federal funds rate unchanged at the record-low level of near zero since the start of the pandemic. /IANS