Central Banks

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The Federal Reserve kept rates unchanged, kept QE infinity open with TALF for open-ended Treasuries, MBS and corporate bonds in amounts needed. Fed will continue to buy paper at current pace of $120B/month of Treasuries and MBS combined. Compared that to $40B/month in QE3.

 Fed Boardroom

Federal Reserve Emergency FOMC Statement

Federal Reserve Announcement Wed 10 June 2020 14:00:00 ET

FOMC Benchmark Interest Rate Target Range UNCH .00-0.25%

Interest Rate On Excess Reserves UNCH .10%

Conference To Follow At 2.30 ET PM With Chairman Powell

Highlights

  • Will increase holdings of bonds 'over the coming months' at least at the current pace to smooth markets
  • Buying will continue across curve
  • Will buy approximately $80B a month in Treasuries and $40B a month in agency MBS
  • Dots pin rates at zero through 2022 but two dots show lift-off in 2022
  • Rates unchanged, as expected Repeats pledge to use full range of tools to support US economy
  • Repeats that health crisis will weigh heavily on activity and poses considerable risks to the outlook over medium-term
  • Financial conditions have improved, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.

 

June 10 For release at 2:00 p.m.EDT

The full FOMC statement for June 10 2020

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.

The coronavirus outbreak is causing tremendous human and economic hardship across the United States and around the world. The virus and the measures taken to protect public health have induced sharp declines in economic activity and a surge in job losses. Weaker demand and significantly lower oil prices are holding down consumer price inflation. Financial conditions have improved, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.

The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term. In light of these developments, the Committee decided to maintain the target range for the federal funds rate at 0 to 1/4 percent. The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.

The Committee will continue to monitor the implications of incoming information for the economic outlook, including information related to public health, as well as global developments and muted inflation pressures, and will use its tools and act as appropriate to support the economy. In determining the timing and size of future adjustments to the stance of monetary policy, the Committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2 percent inflation objective. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.

To support the flow of credit to households and businesses, over coming months the Federal Reserve will increase its holdings of Treasury securities and agency residential and commercial mortgage-backed securities at least at the current pace to sustain smooth market functioning, thereby fostering effective transmission of monetary policy to broader financial conditions. In addition, the Open Market Desk will continue to offer large-scale overnight and term repurchase agreement operations. The Committee will closely monitor developments and is prepared to adjust its plans as appropriate.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Patrick Harker; Robert S. Kaplan; Neel Kashkari; Loretta J. Mester; and Randal K. Quarles.

June 10 FOMC STATEMENT CHANGES via RANsquawk @RANsquawk

 

 Image

Source: Federal Reserve

From the TradersCommunity Research Des

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