If you missed the Federal Open Market Committee statement and Chair Powell’s press conference on changes to US monetary policy, in summary:
The FOMC will ‘taper’ its QE purchase programme, as was widely expected
- asset purchase reductions will begin immediately, this month
- the reduction will be US$15bn/month
- $10bn in US Treasuries, $5bn in MBS
- the rate of taper will change as required
There was, of course, no change to Fed funds rate, unchanged at 0% to 0.25%.
The FOMC statement said inflation remained elevated and that it is “largely reflecting factors that are expected to be transitory”. Powell reiterated that the Fed sees supply bottlenecks continuing into 2022 but inflation will drop in Q2 or Q3, policy will adapt appropriately.
For more, read from the bottom up for the chronological order:
As a heads up – the Bank of England decision is later today (during the UK session, of course). Expectations are split on what we’ll be getting from them, I’ll have more to come on this separately .