The Federal Reserve have signaled that the central may act sooner than previously planned to start dialing back the low-interest-rate policies that have helped fuel a swift rebound from the pandemic recession but have also coincided with rising inflation.

At a news conference, Chair Jerome Powell said the Fed’s policymaking committee discussed when to hike key rates the Fed controls and when to reduce its monthly bond purchases. The purchases, which consist of $120 billion in Treasury and mortgage bonds, are intended to keep longer-term rates low to encourage borrowing.

Here is what this news may mean …

Q. What will the Fed do when it acts?

A. The Fed has made clear that its first step in slowing its support for the economy will be to pare its bond purchases — and that it would begin to raise rates only sometime after that. Its key rate has been pinned near zero since March 2020.

Powell told reporters Wednesday that while reaching policy makers’ goal of “substantial further progress” on their objectives to begin slowing its bond buying was “still a ways off, participants expect that progress will continue.”

And when the central bank is ready to signal the start of tapering, it will be very careful, Powell said. “It will be orderly, methodical and transparent,” he said.

Q. What did traders think?

A. Yields on Treasury bonds surged after policy makers surprised markets. The pronouncements showed the central bank is gaining confidence in the economic outlook, giving a boost to bond bears who think rates will rise.

But bulls — seeing flat to lower rates — can focus on the millions still out of work in the wake of the pandemic, the lingering threat of virus variants and Powell’s insistence that the actual start of any policy normalization was still far off.

The Fed projections are “more aggressive than most market participants were expecting,” said Zachary Griffiths, a rates strategist at Wells Fargo. “That a big indicator of where the policy rate could be down the road. And also a key takeaway was that the Fed is starting to think about thinking about tapering their asset purchases.”

On Wednesday, 10-year yields rose as much as 10 basis points to 1.59%. They extended a rebound from a three-month low of 1.427% hit last week, and touched the highest since June 4. The day’s high was still well below the 2021 peak of 1.77% reached in March. The projections of when officials envision lifting their benchmark overnight rate from near zero also boosted the dollar.

Stocks fell after the Fed announcement, with the S&P 500 down 0.5% to 4,223 and the Dow Jones Industrial Average off 0.8%, to 34,033.

Q. Any guesses when it might start?

A. The Fed’s quarterly projections showed 13 of 18 officials favored at least one rate increase by the end of 2023, versus seven in March. Eleven officials saw at least two hikes by the end of that year. In addition, seven of them saw a move as early as 2022, up from four.

“After dismissing rising inflation and inflation expectations for the past three months and focusing solely on the labor market, it feels like the FOMC just put its hands back on the wheel,” Jefferies analysts Thomas Simons and Aneta Markowska wrote in a note.

If long-term inflation expectations rise significantly, the Fed will be ready to adjust policy, Powell said.

Q. Is Powell hedging his bets?

A. Sung Won Sohn, an economist at Loyola Marymount University in Los Angeles, suggested that the markets’ initially negative reaction to the Fed’s statement might have caused Powell to take a more dovish tone at his news conference. (“Doves,” in Fed parlance, typically focus on the Fed’s mandate to maximize employment and worry less about inflation. “Hawks,” by contrast, tend to concern themselves more with the need to prevent high inflation.)

“We got two different messages from the Fed today,” Sohn said. “The interest rate projections were a bit more hawkish than the market expected.”

But at his news conference, Sohn said, Powell “emphasized that the economy is still not where it should be, especially in terms of unemployment …. and the Fed still thinks the economy needs stimulus from the central bank.”

Associated Press and Bloomberg contributed to this report to this report.