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FOMC Adds Conditions to Forward Guidance; Rates 0 Thru 2023; 2 Dissents

FED
(MNI) WASHINGTON
  • FOMC adds economic conditions to its forward guidance: "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."
  • It maintains promise to buy Treasuries and agency MBS "at least at the current pace to sustain smooth market functioning" but adds "and help foster accommodative financial conditions"
  • Kaplan dissents saying he "prefers that the Committee retain greater policy rate flexibility beyond that point"
  • Kashkari dissents saying he prefers the Fed to "maintain the current target range until core inflation has reached 2 percent on a sustained basis."
  • One official sees liftoff in 2022 and four see liftoff in 2023
  • No changes to longer run estimates of unemployment, inflation or rates
MNI Washington Bureau | +1 202-371-2121 | jean.yung@marketnews.com
MNI Washington Bureau | +1 202-371-2121 | jean.yung@marketnews.com

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