China News Service, New York, November 3. The Federal Reserve Board announced on the 3rd that it will maintain the target range of the federal funds rate unchanged at 0-0.25%, which is in line with market expectations.
The Fed also stated that it will start a reduction in asset purchase plans this month.
The Federal Reserve issued a statement after the two-day regular monetary policy meeting, stating that US economic activity and employment indicators continue to strengthen.
The situation of the industries most affected by the epidemic has improved, but the continuous increase in confirmed cases of new coronary pneumonia has affected the recovery speed of the industry.
The rising inflation rate largely reflects temporary factors. The imbalance between supply and demand related to the epidemic and economic restart has caused prices in some industries to rise sharply.
The overall financial situation remains accommodative.
The statement stated that, affected by the new crown epidemic, risks to the U.S. economic outlook remain.
The Federal Open Market Committee of the Federal Reserve seeks to achieve the goal of full employment and a longer-term inflation rate of 2%, and will continue to adhere to a loose monetary policy until substantial progress is made.
The committee decided to maintain the target range of the federal funds rate unchanged at 0-0.25%.
The statement pointed out that in view of the fact that the U.S. economy has made further substantive progress towards the above-mentioned goals since December last year, the Federal Open Market Committee has decided to launch a reduced asset purchase plan later this month, reducing the size of monthly asset purchases by 15 billion U.S. dollars. .
Prior to this, the Federal Reserve has been increasing its holdings of U.S. Treasury bonds at a rate of at least US$80 billion per month, and buying institutional mortgage-backed securities at a rate of no less than US$40 billion per month.
Beginning in November this year, the Fed’s increased holdings of treasury bonds and the purchase of institutional mortgage-backed securities will be adjusted to US$70 billion and US$35 billion, respectively; from December this year, the purchase volume of national debt and institutional mortgage-backed securities will be adjusted respectively. To 60 billion U.S. dollars and 30 billion U.S. dollars.
The statement stated that after the reduction in asset purchases in November and December, the Federal Open Market Committee believes that it may be appropriate to continue to maintain similar monthly declines, but if the economic outlook changes, the committee will also be ready to adjust the pace of purchases. Prepare.
"The Wall Street Journal" reported that the market had predicted in advance that the Fed would begin to reduce asset purchases in November, and the US stock market reacted softly to the news of the reduction in debt purchase plans.
On the same day, the three major U.S. stock indexes closed up collectively, all setting record highs at intraday and closing points. Among them, the Dow Jones Industrial Average closed at 36157.58 points.
Fed Chairman Powell said after the regular monetary policy meeting that the process of reducing asset purchases is expected to end in the middle of next year, and he once again emphasized that the timing of reducing asset purchases is not directly related to the timing of interest rate hikes.
Regarding the current supply shortage facing the economy, Powell said that it is difficult to predict the duration of supply restrictions and their impact on inflation, but the supply chain will eventually return to normal.
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