United States Federal Reserve announced on Wednesday that its net asset purchases will be cut by $30 billion in total on a monthly basis, including $20 billion for Treasury securities and $10 billion for agency mortgage-backed securities. All figures have been doubled compared to the previous monetary policy statement. The Federal Open Market Committee (FOMC) said it “is prepared to adjust the pace of purchases if warranted by changes in the economic outlook.”
Meanwhile, the target range for the federal funds rate was left unchanged at 0%-0.25%. Considering that the annual inflation rate has been exceeding the Fed’s 2% goal “for some time,” the FOMC “expects it will be appropriate to maintain this target range [0%-0.25%] until labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment.”
Fed’s projections also showed that 12 of 18 policymakers expect at least three rate hikes in 2022, with two of the 12 estimating that there will be as much as four interest rate increases next year.