Federal Reserve Keep Rates Steady as Expected, Current Stance of Monetary Policy is Appropriate

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    Helmholtz Watson

    The Federal Reserve as expected kept rates at…


    Helmholtz Watson

    [size=5][b]Powell opening statement:
    US economic outlook remains favorable
    We expect moderate growth to continue
    Notes rising incomes and consumer confidence
    Monetary policy well-positioned to serve Americas
    Wages have been rising particularly for lower-paying jobs
    Inflation persistently below 2% could be unhealthy
    Policy is not on a pre-set course and will respond accordingly to material changes in the outlook
    Pressures in money markets in recent weeks have been subdued
    Stand ready to adjust repo operations to keep Fed fund rate in target range

    Helmholtz Watson

    FOMC minutes:of the Dec meeting

    Highlights of the minutes

    Rates likely to remain appropriate for a time unless there’s a material change
    A few policymakers raised concerns that keeping rates low for a long time could exacerbate imbalances in financial sector
    Fed saw risks to outlook as tilted to the downside but that some risks had eased in recent months
    More sanguine view of risks owed to easing US-China tensions, along with lower probability of no-deal Brexit
    Topics for future discussion included composition of long-term Treasuries in holdings
    Discussed expectations to gradually transition away from active repo operations next week

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