Federal Reserve officials unanimously supported stabilizing the pace of asset purchases when they met last month, leaving some open to “future adjustments” if necessary.
“All participants decided that it would be appropriate to continue those purchases at least at the current pace, and nearly all were in favor of maintaining the current structure of purchases,” according to Their December 15 meeting was published on Wednesday. “A couple of participants indicated that they were open to purchasing Treasury securities toward longer maturity.”
The Federal Open Market Committee held interest rates near zero and strengthened its commitment to buy bonds at the meeting, promising to maintain a $ 120 billion monthly pace until “substantial progress toward its employment and inflation goals” “No.
“some” Noted The committee may consider future adjustments to its asset purchases – such as accelerating the purchase of securities or reducing the purchase of treasury securities towards those now remaining maturities – if such an adjustment is justified. Considered, “Minutes said.
Chair Jerome Powell described the new guidance as “powerful”, although both policymakers and investors have since struggled to determine what would trigger a taping in asset purchases. Cleveland Fed President Loretta Meister said that this week she Property purchases are not expected to decrease until 2022, while Atlanta Fed chief Rafael Botik said taping could occur This year if vaccine delivery improves approach.
“It does not appear that there was much energy towards making a change,” said Stephen Stanley, chief economist at Amherst Pierpoint Securities. “I doubt we’ll see the structure of the purchase until the long end of the yield curve is considered spiraling out of control.”
By what he meant by “moving forward adequately”, officials emphasized the decision that it would “not be based on a broad, qualitative and specific numerical criterion or range.”
number of participants Noted Once such progress is made, a gradual taping of the procurement can begin and the subsequent process may be similar to the sequence typically implemented during the mass procurement program in 2013 and 2014. “
16 December of FOMC “Economic activity and employment are recovering but are well below their level at the beginning of the year,” the statement said. There was some improvement in its quarterly estimates for the economy compared to September.
Officials in the minutes discussed the impact of the rollout of Kovid-19 vaccines, even as the increase in infection would slow the economy in the coming months.
“Nevertheless, the positive vaccine news received in the inter-meeting period was considered favorable for the medium-term economic outlook.”
The US central bank at the start of the coronovirus epidemic in March nearly doubled its benchmark interest rate and accelerated crisis-era bond-buying programs to pump liquidity into the financial system and keep a lid on long-term interest rates. Granted.
Officials have indicated that they will likely hold rates near zero through at least 2023.
At last month’s meeting, he projected lower pressures on inflation “next year”, though a couple suggested that technology-enabled disruptions and permanent epidemic-induced restrictions on firms could keep the pricing power a lid on prices.
Minute Noted Seven participants – more than five in September – are expected to have overall inflation above the committee’s 2% objective in 2023, while staff forecast a slight overshoot to continue “for some time in the years beyond 2023”. “
– assisted by Katrina Sarava, Craig Torres, Rich Miller, and Matthew Bossler
(Updates with analyst feedback in sixth paragraph.)