Federal Reserve rate decision highlights April 29, 2020
- Rates unchanged in a range of 0.00%-0.25%, as expected
- Fed says rates to stay at lower bound until economy has weathered recent events and on track to achieve unemployment and inflation goals
- Interest on excess reserves unchanged at 0.10%
- Public health crisis will weigh heavily on the economy, employment and inflation in the near term
- Will monitor incoming information for economic outlook and public health along with global developments in setting policy
- Will continue buying Treasuries, agencies and commercial MBS in amounts needed
- Will continue to offer large-scale repos
- Disruptions to economic activity in US and broad have significantly affected financial conditions
- Full text
- Redline
The key line relates to forward guidance and is essentially unchanged:
The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.
This is somewhat of a hint that in the medium-term there's something a bit better:
The ongoing public health crisis will weigh heavily on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term.
There is absolutely nothing in this statement that's anything less than dovish. If you go back to before the pandemic, the Fed was already shifting to an ultra-dovish policy and now they're going to run with that until they inflate some insane bubbles.
Powell will host a virtual press conference at 1830 GMT. The next scheduled meeting is June 9-10
