FOMC leaves rates unchanged, repeats that it is committed to full range of tools
Highlights of the FOMC interest rate decision
- Fed funds rate left at 0 to 0.25%, as expected
- IOER left at 0.10%, as expected
- Says will keep USD swap lines and repo facility for foreign central banks open through March 31, 2021
- Vote was unanimous
- Says path of economy will depend significantly on the course of the virus
- Repeats that ongoing crisis will weigh heavily on economic activity, employment and inflation in the near term
- Says economic activity and employment have picked up somewhat in recent months but remain well below their levels at the beginning of the year
The lone change I see is this line:
The virus and the measures taken to protect public health have induced sharp declines in economic activity and a surge in job losses
Following sharp declines, economic activity and employment have picked up somewhat in recent months but remain well below their levels at the beginning of the year.
The initial market reaction has been almost nil. Powell speaks at the bottom of the hour.
There were two risks heading into the decision: 1) that the Fed would launch or hint at something new in terms of programs/policy 2) that they would say something negative about the economy. Neither happened and markets generally indifferent