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--Holds Target Range for Fed Funds Rate at 1.50%-1.75%
--Technical Adjustment Brings IOER to 1.60%; ON RRP to 1.50%
--Tweaks Statement To Say Policy Supports Return To 2% Inflation Goal
By Jean Yung
     WASHINGTON (MNI) - Federal Reserve officials on Wednesday 
unanimously agreed to hold benchmark short-term interest rates steady in 
a 1.50% to 1.75% target range and said it would continue conducting term 
and overnight repo operations through April to mitigate risks of money 
market disruptions. 
     The Federal Open Market Committee directs its Open Market Desk to 
continue conducting term and overnight repo operations "at least through 
April 2020 to ensure that the supply of reserves remains ample even 
during periods of sharp increases in non-reserve liabilities, and to 
mitigate the risk of money market pressures that couuld adversely affect 
policy implementation," the Fed said. 
     The central bank also nudged higher its interest rate paid on 
required and excess reserves by 5bps to 1.60% "to foster trading in the 
fedreal funds market at rates well within the FOMC's target range," it 
said. The overnight reverse repurchase rate was also raised to 1.50% 
from 1.45%. The effective or median fed funds rate had settled at 1.55% 
in recent days, just slightly above the bottom of the target range. 
     The following are other takeaways from the statement: 
     --The FOMC tweaked its inflation language to say that the current 
stance of monetary policy is appropriate to support inflation returning 
to" the Fed's symmetric 2% objective, rather than "near" the 2% 
objective. Officials at their December meeting had debated the change, 
saying "near" 2% could be misinterpreted as suggesting that policymakers 
were comfortable with inflation running below that level. 
     --The Fed downgraded its assessment of household spending to 
"rising at a moderate pace" from a "strong pace," but repeated that the 
labor market remains strong and economic activity is rising at a 
moderate rate. 
     --There were no other changes to the statement. The FOMC again 
pledged to monitor "global developments and muted inflation pressures."  
--MNI Washington Bureau, Tel: +1 202-371-2121; email: dcoffice@marketnews.com
     ** MNI Washington Bureau: 202-371-2121 ** 
[TOPICS: MT$$$$,MMUFE$,MGU$$$,M$U$$$,MAUDR$]

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