The Federal Open Market Committee (FOMC) unanimously decided on Wednesday to leave interest rates near zero and expects to maintain its monetary policy “until labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time.” Furthermore, the FOMC acknowledged that progress in vaccinations against the coronavirus and policy support have led to signs of economic strength and rising inflation. However, policymakers conceded that “the ongoing public health crisis continues to weigh on the economy, and risks to the economic outlook remain.” Finally, the Fed said that it intends to keep its current pace of security purchases at up to $120 billion a month.
Very worried about scaring in labor market
Federal Reserve Chair Jerome Powell stressed on Wednesday that the Fed is “very worried” about scarring in the United States labor market. Powell noted the US hasn’t so far experienced this level of scarring, warning the country remains a long way from full employment. However, he noted the scarring is lower compared to last year’s predictions. The Fed’s chairman concluded by saying that the wages in the US would be rising if labor market conditions were tighter. Powell spoke following the Fed’s decision to leave key interest rates unchanged.
Not time yet to start talking about tapering
Federal Reserve Chairman Jerome Powell said on Wednesday that it is still early to start talking about tapering as the Fed still wants to see “substantial further progress” before it begins to unwind its balance sheet. “We’ll let the public know well in advance. It will take some time before we see substantial further progress,” Powell told reporters. Additionally, the Fed chief said that a transitory rise in inflation above 2% this year would not be enough for the central bank to raise rates. Earlier, the Federal Open Market Committee unanimously decided to leave interest rates near ZERO. Nick Note: The Fed is spiking the punch bowl. And they and their Lemmings are just not sure just yet if this is the hottest economy and hottest stock market ever….. PERFECT! ………. because we know