FOMC Meeting: Key Takeaways
July FOMC meeting | July 28, 2021
The Federal Open Market Committee (FOMC) decided to leave the federal funds rate unchanged at 0.00%–0.25%. The Federal Reserve (Fed) also announced that it will continue to purchase at least $80 billion in Treasury securities and at least $40 billion in agency mortgage-backed securities until substantial further progress has been made toward the Committee’s goals.
With progress on vaccinations and strong policy support, indicators of economic activity and employment have continued to strengthen.
Inflation has risen, largely reflecting transitory factors.
Overall financial conditions remain accommodative.
The path of the economy continues to depend on the course of the coronavirus.
The FOMC expects to maintain the target range (0.00%–0.25%) until labor market conditions reach levels consistent with the Committee’s assessment of maximum employment and inflation rises to 2% and is on track to moderately exceed 2% for some time.
The FOMC 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 to the Committee’s goals emerge.
The Fed continues to assert its view that inflation pressures are consistent with a transitory view.
The Fed is still on a path to remain accommodative for some time. If current economic trends continue, we expect that the Fed may begin to taper asset purchases near year-end.
The Fed stated that it has made progress toward goals that would allow it to taper bond purchases. If current economic trends continue, we expect that the Fed may begin to taper asset purchases near year-end.
We view this meeting as a status quo meeting. The Fed did little to change market views.
The vote for the policy statement was unanimous.
|Upcoming Meeting Schedule||September 22* | November 3 | December 15* | January 26
*Indicates the meeting is associated with a summary of economic projections. In addition, every meeting will be accompanied by a press conference.
Global Investment Strategy (GIS) is a division of Wells Fargo Investment Institute, Inc. (WFII). WFII is a registered investment adviser and wholly-owned subsidiary of Wells Fargo Bank, N.A., a bank affiliate of Wells Fargo & Company.
The information in this report was prepared by Global Investment Strategy. Opinions represent GIS’ opinion as of the date of this report and are for general information purposes only and are not intended to predict or guarantee the future performance of any individual security, market sector or the markets generally. GIS does not undertake to advise you of any change in its opinions or the information contained in this report. Wells Fargo & Company affiliates may issue reports or have opinions that are inconsistent with, and reach different conclusions from, this report.
The information contained herein constitutes general information and is not directed to, designed for, or individually tailored to, any particular investor or potential investor. This report is not intended to be a client-specific suitability or best interest analysis or recommendation, an offer to participate in any investment, or a recommendation to buy, hold or sell securities. Do not use this report as the sole basis for investment decisions. Do not select an asset class or investment product based on performance alone. Consider all relevant information, including your existing portfolio, investment objectives, risk tolerance, liquidity needs and investment time horizon.
Wells Fargo Advisors is registered with the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority, but is not licensed or registered with any financial services regulatory authority outside of the U.S. Non-U.S. residents who maintain U.S.-based financial services account(s) with Wells Fargo Advisors may not be afforded certain protections conferred by legislation and regulations in their country of residence in respect of any investments, investment transactions or communications made with Wells Fargo Advisors.
Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC, Members SIPC, separate registered broker-dealers and non-bank affiliates of Wells Fargo & Company.