FOMC: como trabalha o “Copom” americano - Federal Reserve Board, Boston Globe

 Federal Reserve Board, Washington DC – 28.4.2021

Federal Reserve issues FOMC statement

 

The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals.

The COVID-19 pandemic is causing tremendous human and economic hardship across the United States and around the world. Amid progress on vaccinations and strong policy support, indicators of economic activity and employment have strengthened. The sectors most adversely affected by the pandemic remain weak but have shown improvement. Inflation has risen, largely reflecting transitory factors. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.

The path of the economy will depend significantly on the course of the virus, including progress on vaccinations. The ongoing public health crisis continues to weigh on the economy, and risks to the economic outlook remain.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With inflation running persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer‑term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved. The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee's assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time. In addition, the Federal Reserve will continue to increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgage‑backed securities by at least $40 billion per month until substantial further progress has been made toward the Committee's maximum employment and price stability goals. These asset purchases help foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on public health, labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Thomas I. Barkin; Raphael W. Bostic; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Mary C. Daly; Charles L. Evans; Randal K. Quarles; and Christopher J. Waller.

 

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Boston Globe,29.4.2021

Fed Upgrades View of Economy While Keeping Rates Near Zero

Craig Torres and  Catarina Saraiva

 

Federal Reserve officials strengthened their assessment of the economy on Wednesday and signaled that risks have diminished while leaving their key interest rate near zero and maintaining a $120 billion monthly pace of asset purchases.

“Amid progress on vaccinations and strong policy support, indicators of economic activity and employment have strengthened,” the Federal Open Market Committee said in a statement following the conclusion of its two-day policy meeting. “The sectors most adversely affected by the pandemic remain weak but have shown improvement. Inflation has risen, largely reflecting transitory factors.”

Marking a clear improvement since the pandemic took hold more than a year ago, the Fed said that “risks to the economic outlook remain,” softening previous language that referred to the virus posing “considerable risks.” The statement also noted that sectors hit hardest by the Covid-19 pandemic had “shown improvement.”

Ten-year treasury yields rose to its high of the day before paring back, while inflation expectations over the decade held near their highest since April 2013. The dollar moved toward its lows of the day and the S&P 500 moved higher.

Powell and his colleagues met amid growing optimism for the U.S. recovery, helped by widening vaccinations and aggressive monetary and fiscal support. President Joe Biden will unveil a sweeping $1.8 trillion plan to expand educational opportunities and child care when he addresses a joint session of Congress later on Wednesday, while highlighting his $2.25 trillion infrastructure proposal and the $1.9 trillion pandemic relief package he signed into law last month.

At the same time, a rise in coronavirus cases in some regions around the world casts a shadow over global growth prospects, giving policy makers reason to remain patient on withdrawing support. Fed officials have also been largely dismissive of inflation risks for the time being, saying a jump in consumer prices last month was distorted by a pandemic-related decline in prices in March 2020.

 

Wednesday’s FOMC decision was unanimous.

 

Fed Chair Jerome Powell told a post-meeting press conference that the recovery has been faster than expected but “it remains uneven and far from complete” and the economy “is a long way from our goals.”

U.S. central bankers repeated they would not change the pace of bond buying until “substantial further progress” is made on their employment and inflation goals. The target range of the benchmark federal funds rate was kept at zero to 0.25%, where it’s been since March 2020.

Powell said that it was not yet time to discuss scaling back asset purchases and “it will take some time before we see substantial further progress.”

Economic Growth

Forecasters surveyed by Bloomberg expect the U.S. economy this year to expand at the fastest pace in more than three decades, with the Fed expected to announce in late 2021 that it will start slowing the pace of asset purchases.

U.S. central bankers have backed expansive fiscal policy, noting that millions of Americans are still unemployed and run the risk of remaining jobless for the long-term if they don’t find work soon.

Since their March meeting, officials have seen the S&P 500 stock index continue to rally while yields on the government 10-year note, after a sharp move up in the first quarter, have traded in a range around 1.6%. The labor market in March added the most jobs in seven months as improvements across regions around the world casts a shadow over global growth prospects, giving policy makers reason to remain patient on withdrawing support. Fed officials have also been largely dismissive of inflation risks for the time being, saying a jump in consumer prices last month was distorted by a pandemic-related decline in prices in March 2020.

Wednesday’s FOMC decision was unanimous.

Fed Chair Jerome Powell told a post-meeting press conference that the recovery has been faster than expected but “it remains uneven and far from complete” and the economy “is a long way from our goals.”

U.S. central bankers repeated they would not change the pace of bond buying until “substantial further progress” is made on their employment and inflation goals. The target range of the benchmark federal funds rate was kept at zero to 0.25%, where it’s been since March 2020.

Powell said that it was not yet time to discuss scaling back asset purchases and “it will take some time before we see substantial further progress.”

Economic Growth

Forecasters surveyed by Bloomberg expect the U.S. economy this year to expand at the fastest pace in more than three decades, with the Fed expected to announce in late 2021 that it will start slowing the pace of asset purchases.

U.S. central bankers have backed expansive fiscal policy, noting that millions of Americans are still unemployed and run the risk of remaining jobless for the long-term if they don’t find work soon.

Since their March meeting, officials have seen the S&P 500 stock index continue to rally while yields on the government 10-year note, after a sharp move up in the first quarter, have traded in a range around 1.6%. The labor market in March added the most jobs in seven months as improvements across most industries boosted nonfarm payrolls by 916,000.

Officials have also said policy changes will be based on outcomes, not a forecast, meaning a string of powerful monthly labor market gains would be needed to merit “substantial further progress.” (Bloomberg)

 

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