Central Banks

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The Federal Reserve kept rates unchanged at their June meeting, kept QE infinity open with TALF for open-ended Treasuries, MBS and corporate bonds in amounts needed. The big change is in the dot plot median for the end of 2023 now at 0.6% from 0.1% back in March.

 Fed Boardroom

Federal Reserve FOMC Statement

Federal Reserve Announcement  Wednesday 16 June 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 unchanged at 0.0-0.25%
  • QE will continue at $80B in Treasuries and $40B in MBS per month'
  • Progress on vaccinations has reduced the spread of COVID-19 in the United States
  • 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.
  • Repeats that inflation has risen, largely reflecting transitory factors
  • Vote unanimous
  • Fed extends dollar swap lines with 9 global central banks through Dec 31

 Change From Last Month:

  • Seven FOMC members saw no hike in 2023 but 13 now do.
  • Seven now see at least one hike in 2022, which is as many there were for 2023 just three months ago.
  • They've arguably moved the pace of hikes forward by a full year in just three months.

 

June 16 2021 For release at 2:00 p.m.EDT

The full FOMC statement for June 16 2021 

 For release at 2:00 p.m. EDT

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.

Progress on vaccinations has reduced the spread of COVID-19 in the United States. Amid this progress and strong policy support, indicators of economic activity and employment have strengthened. The sectors most adversely affected by the pandemic remain weak but have shown improvement. Inflation has risen, 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 will depend significantly 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. In addition, the Federal Reserve will 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 the Committee's maximum employment and price stability goals. 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.

June 16 FOMC STATEMENT CHANGES via Newsquawk @Newsquawk

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Source: Federal Reserve

From the TradersCommunity Research Des

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