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Fed FOMC Results: Fed splits with 2022 rate hike as bond purchase taper may begin shortly

The Federal Reserve Board signaled that they would probably start Tapered Their bond-buying program began soon, revealing an increasing tendency to start raising interest rates in 2022.

If you progress towards Federal Reserve SystemThe US Central Bank’s decision-making Federal Open Market Committee followed two statements on Wednesday, with employment and inflation targets “as expected widespread and could soon justify slowing the pace of asset purchases. I have determined that there is. ” Daytime meetings.

The Federal Reserve Board has also been updated to show that authorities are evenly divided on whether it is appropriate to start raising federal funds rates soon next year, according to median estimates. Announced quarterly forecast FOMC participant. The median forecast for June showed that there would be no rate hikes until 2023.

Federal Reserve Board Chair Jerome Powell will hold a virtual press conference in Washington at 2:30 pm to discuss the Bank’s first steps to withdraw urgent pandemic support for the economy.

His performance is analyzed by both investors and the White House. The term of office of the central bank chief expires in February, and President Joe Biden will decide whether to appoint him for another four years this fall.

New projection

The FOMC has decided to maintain the benchmark discount rate target range of 0-0.25% and continue to purchase government bonds and mortgage-backed securities at a monthly pace of $ 120 billion. The vote was unanimous.

The 2024 forecast was also released for the first time, with the median suggesting a federal funds rate of 1.8% by the end of the year. The median of 2023 rose from the June forecast of 0.6% to 1%.

The Federal Reserve Board also said it would double the overnight reverse repo contract facility’s counterparty limit to $ 160 billion per day.

The US unemployment rate fell to 5.2% in August, well below its April 2020 peak of 14.8%. However, it is still above the 3.5% that prevailed in February 2020, just before the pandemic. The Federal Reserve Board said it hopes to keep fund interest rates near zero “until the labor market conditions reach a level consistent with the Commission’s assessment of maximum employment.”

Inflation was 4.2% in the 12 months to July, well above the central bank’s 2% target, according to the Federal Reserve Board’s recommended indicators. Many Fed officials say they expect it to return to around 2% after the temporary supply chain disruption caused by the pandemic has resolved, but it’s a sharp reason to start raising prices as early as next year. Some people have cited a sharp price increase. ..

Fed FOMC Results: Fed splits with 2022 rate hike as bond purchase taper may begin shortly Fed FOMC Results: Fed splits with 2022 rate hike as bond purchase taper may begin shortly

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