FOMC Will Reduce Securities Purchases; Holds Rates Steady
by:Tom Moeller
|in:Economy in Brief
At today's meeting of the Federal Open Market Committee (FOMC), the Fed indicated it will further scale back the stimulus it has been providing to a pandemic-stricken economy.
Beginning next month the Fed will reduce its planned purchases of Treasury securities to $40 billion per month from $70 billion as indicated in the last meeting and to pare purchases of agency securities to $20 billion per month from $30 billion.
The Federal funds rate target, however, will remain in a range of 0.0% to 0.25%, where it has been since March 2020.
The Fed stated "With progress on vaccinations and strong policy support, indicators of economic activity and employment have continued to strengthen. The sectors most adversely affected by the pandemic have improved in recent months. 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."
Concern regarding price inflation was again expressed. "Supply and demand imbalances related to the pandemic and the reopening of the economy have continued to contribute to elevated levels of inflation."
The statement issued following today's meeting can be found here.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
More Economy in Brief
Global
