China News Service, New York, September 22. The Federal Reserve Board announced on the 22nd 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 Federal Reserve issued a statement after a two-day regular monetary policy meeting, stating that US economic activity and employment indicators continue to strengthen.
The situation in the industries most affected by the epidemic has improved, but the continuous increase in confirmed cases of new coronary pneumonia has affected the speed of industry recovery.
The rising inflation rate largely reflects temporary factors.
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%.
Since December last year, the Federal Reserve has promised to maintain a monthly asset purchase portfolio of 120 billion US dollars, that is, to increase its holdings of US Treasury bonds at a rate of at least 80 billion US dollars per month, and to purchase at a rate of no less than 40 billion US dollars per month. Institutions mortgage loans to back securities until the economy achieves "substantial further progress" towards full employment and a longer-term inflation rate of 2%.
In this statement, the Federal Reserve pointed out that the U.S. economy has made progress towards the aforementioned goals.
The Federal Open Market Committee believes that if the economy generally continues to develop as expected, the Fed may soon begin to reduce asset purchases.
On the same day, the Fed also announced a summary of economic forecasts that have attracted much attention from financial markets.
The summary shows that the Federal Reserve lowered the median forecast for this year's GDP growth by 1.1 percentage points to 5.9%, and raised the median forecast for this year's inflation by 0.8 percentage points to 4.2%.
In addition, the dot matrix chart of the interest rate hike path in the summary shows that of the 18 FOMC members, 9 predict that interest rates will start to increase in 2022, an increase of 2 from June this year; 17 predict the end of 2023 Interest rates will be raised at least once before, and 10 of them believe that interest rates will be raised three times before the end of 2023.
The “Wall Street Journal” reported that the Fed’s statement this time implies that it may begin to reduce asset purchases as early as November 3.
Although the Fed did not give a clear timetable for the reduction, it has signaled that it will take action after the next monetary policy meeting at the earliest.
Fed Chairman Powell said after the regular monetary policy meeting that reducing asset purchases is a gradual process, and it is expected that this process will be completed around mid-2022.
Powell also emphasized that the timing of reducing debt purchases is not directly related to the timing of raising interest rates. The criteria for considering whether to raise interest rates are not only different but also stricter.
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