In the latest FOMC meeting, Federal Reserve officials intensified their battle against the hottest inflation in a generation by shifting to end their asset-buying program earlier and signalling they favour raising interest rates in 2022 at a faster pace than expected.

Fed officials also expressed concerns in minutes from its December meeting, released Wednesday, that surging inflation was spreading into more areas of the economy and would last longer than they previously expected.

The Federal Reserve is seeking to control inflation by influencing interest rates. When inflation is too high, the Federal Reserve typically raises interest rates to slow the economy and bring inflation down. When inflation is too low, the Federal Reserve typically lowers interest rates to stimulate the economy and move inflation higher.

To discuss the impact of Fed's decision on global markets, CNBC-TV18 spoke to Alvin Tan, Head of Asia FX Strategy at RBC Capital.

Watch video for more.

First Published:Jan 6, 2022 6:29 PM IST