(ABM FN-Dow Jones) The Federal Reserve left its key rates unchanged as expected. This was revealed by the US central bank’s decision on interest rates on Wednesday evening.

As expected, the fed funds rate remained at 0.00 to 0.25%. The discount rate has been maintained at 0.25%.

The decision to maintain the policy was taken unanimously.

In addition, the Fed purchases a total of $ 120 billion in Treasury loans and mortgages each month to keep financial markets stable and support the US economy.

Last December, the Policy Committee said it would continue the asset purchase program until significant progress is made towards maximizing employment and stabilizing prices.

The central bank now believes that the economy has already made progress towards these targets. If this continues, as expected, the central bank believes that a cut in the short-term purchase rate is warranted.

With that, the Fed made the promised early announcement.

Interest rate expectations

Federal Reserve officials see the policy rate, the federal funds rate, averaging 0.1% through the end of 2021. For 2022, the median forecast is revised up to 0.3% . In the June forecast it was still 0.1%. The 2023 forecast has also been revised upwards from June, from an average forecast of 0.6% to 1.0% now. Over the longer term, the fed funds rate is expected to average 2.5%, which is in line with the June forecast.


PCE inflation is expected to average 4.2% for 2021, up from 3.4% in June. The 2022 estimate was revised up from 2.1 to 2.2%, while the 2023 estimate remained unchanged at 2.2%.


In contrast, GDP growth in 2021 has been revised downward to 5.9%, from 7.0% previously. Growth of 3.8% is now expected in 2022, compared to 3.3% growth in June. In 2023, growth is now estimated at 2.5%, while growth of 2.4% was previously assumed.

Update: to add more information.

Pron: ABM Financial News

De Beursplein 5, Publishers ABM Financial News Keep a close eye on developments on the stock exchanges, and the Amsterdam Stock Exchange in particular. The information in this column is not intended as professional investment advice or as a recommendation for making certain investments.

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