FOMC Meeting: Key Takeaways
September FOMC meeting | September 22, 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.
With progress on vaccinations and strong policy support, indicators of economic activity and employment have continued to strengthen.
Inflation is elevated, 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 until inflation rises to 2% and is on track to exceed 2% for some time.
If progress continues broadly as expected, the Committee judges that a moderation in the pace of asset purchases may soon be warranted.
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 set the stage to announce tapering at its November meeting if the broad trends continue.
The summary of economic projections show that the Fed is split on the potential for a rate increase in 2022. We continue to project the first rate hike in 2023.
The Fed maintained its previously communicated tapering and eventual tightening path at today’s meeting. In general, meeting market expectations is a positive for risk assets.
The vote for the policy statement was unanimous.
|Upcoming Meeting Schedule||November 3 | December 15* | January 26 | March 16*
*Indicates the meeting is associated with a summary of economic projections. In addition, every meeting will be accompanied by a press conference.
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