The Federal Reserve kept rates unchanged at their September meeting, kept QE infinity open with TALF for open-ended Treasuries, MBS and corporate bonds in amounts needed. Inflation has risen, largely reflecting transitory factors. Inflation is elevated, largely reflecting transitory factors
The Federal Reserve kept rates unchanged at their September meeting, kept QE infinity open with TALF for open-ended Treasuries, MBS and corporate bonds in amounts needed. Inflation has risen, largely reflecting transitory factors. Inflation is elevated, largely reflecting transitory factors
Federal Reserve FOMC Statement
Federal Reserve Announcement Wednesday 22 September 2021 14:00:00 ET
FOMC Benchmark Interest Rate Target Range UNCH .00-0.25%
Interest Rate On Excess Reserves IOER hiked to 15 bps from 10 bps
Conference To Follow At 2.30 ET PM With Chairman Powell
Highlights
- Rates left unchanged at 0-0.25%
- Vote unanimous
- Indicators of economic activity and employment have continued to strengthen
- The sectors most adversely affected by the pandemic have improved in recent months, but the rise in COVID-19 cases has slowed their recovery
- Inflation is elevated, largely reflecting transitory factors
- Progress on vaccinations will likely continue to reduce the effects of the public health crisis on the economy, but risks to the economic outlook remain
Change From Last Month:
- “If progress continues broadly as expected, the Committee judges that a moderation in the pace of asset purchases may soon be warranted.”
Fed fund futures
- Pricing an 80% chance of a hike by Dec 2022.
- Dot plot shows even split of 9 Fed members forecasting a 2022 hike and 9 forecasting no change
September 22 2021 For release at 2:00 p.m.EDT
The full FOMC statement for September 22 2021
The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals.
With progress on vaccinations and strong policy support, indicators of economic activity and employment have continued to strengthen. The sectors most adversely affected by the pandemic have improved in recent months, but the rise in COVID-19 cases has slowed their recovery. Inflation is elevated, largely reflecting transitory factors. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.
The path of the economy continues to depend on the course of the virus. Progress on vaccinations will likely continue to reduce the effects of the public health crisis on the economy, but risks to the economic outlook remain.
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With inflation having run persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer‑term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved. The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time. Last December, the Committee indicated that it would continue to increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgage‑backed securities by at least $40 billion per month until substantial further progress has been made toward its maximum employment and price stability goals. Since then, the economy has made progress toward these goals. If progress continues broadly as expected, the Committee judges that a moderation in the pace of asset purchases may soon be warranted. These asset purchases help foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses.
In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on public health, labor market conditions, inflation pressures and inflation expectations, and financial and international developments.
Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Thomas I. Barkin; Raphael W. Bostic; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Mary C. Daly; Charles L. Evans; Randal K. Quarles; and Christopher J. Waller.;
For release at 2:00 p.m. EDT
September 22 FOMC STATEMENT CHANGES via Newsquawk @Newsquawk
Source: Federal Reserve
From the TradersCommunity Research Des