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Economy in Brief

FOMC Will Further Lessen Liquidity and Raise Rates Soon
by Tom Moeller  January 26, 2022

At today's meeting of the Federal Open Market Committee (FOMC), the Fed indicated it will continue to reduce the stimulus it has been providing to the economy.

The Fed announced that it will lessen its planned purchases of Treasury securities to $20 billion per month from $40 billion as indicated at the last meeting, and to pare purchases of agency securities to $10 billion per month from $20 billion.

The meeting statement indicated that the federal funds rate target will remain in a range of 0.0% to 0.25%, where it has been since March 2020, "but the Committee expects it will soon be appropriate to raise the target range for the federal funds rate."

Specifically addressing inflation, the Fed indicated, "Supply and demand imbalances related to the pandemic and the reopening of the economy have continued to contribute to elevated levels of inflation."

The Fed went on to state, "Progress on vaccinations and an easing of supply constraints are expected to support continued gains in economic activity and employment as well as a reduction in 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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