Highlights of the FOMC statement on March 17, 2021:
- Lower bound on Fed funds 0.00% as expected
- Upper bound on Fed funds 0.25% as expected
- Fed to continue to buy $80B/month in Treasuries
- Fed to continue to buy $40B/month in MBS
- Repeats that bond buys will continue to until 'substantial further progress' is made
- Unanimous vote
- Repeats language saying that policy will remain accommodative until inflation runs moderately above 2% for some time
- Says indicators of economic activity and employment have turned up recently following a moderation in activity
- Repeats that path of economy will depend significantly on course of virus and vaccinations
- Full statement
- Dot plot
Median dot plot for 2023 still shows no hike. Bit of a surprise. Just 7 of 18 dots show a hike in 2023. Most thought we'd see a majority put a dot there.
How the market looked moments before the FOMC decision:
The S&P 500 was down 20 points and Nasdaq down 1.1%.
Afterwards the US dollar dropped and risk trades surged. USD/CAD fell to 1.2431, for instance.
