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Economy in Brief

FOMC Will Reduce Securities Purchases; Holds Rates Steady
by Tom Moeller  December 15, 2021

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.

Current Last 2021 2020 2019 2018
Federal Funds Rate Target 0.0% - 0.25% 0.0% - 0.25% 0.08 0.38% 2.17% 1.82%
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