**MNI POLICY: FOMC Pledges Repo Ops Thru April; Raises IOER>

--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$]