On Thursday (3rd) the US Federal Reserve (Fed) announced its November monetary policy decision at 2:00 Taiwan time, raising the target range of the Federal Funds Rate (FFR) by 3 yards (75 basis points) ) to 3.75-4.00% and Continue to reduce the balance.
Here are the wording differences from the Fed’s November meeting statement versus last September’s meeting statement:
Recent spending and output indicators point to moderate growth, with employment growth continuing to be robust and unemployment remaining low. Inflation remains high, reflecting supply and demand imbalances linked to the pandemic, rising food and energy prices and widespread price pressures.
The Russian-Ukrainian war caused enormous humanitarian and economic suffering. The war and related events have exerted further upward pressure on inflation and weighed on global economic activity. The Committee is very concerned about the risks of inflation.
The committee aims to achieve full employment and a long-term inflation rate of 2%. In support of these goals, the committee decided to increase the target range for the federal funds rate from 3.75% to 4.0%.The Committee expects that it would be advisable to continue increasing the target range in order to achieve a sufficiently restrictive monetary policy stance to bring inflation back to 2% over time.
“The September statement read: The Committee seeks to achieve full employment and a long-term inflation rate of 2%. In support of these goals, the Committee decided to increase the target range for the federal funds rate from 3.75% to 4.0%. The Committee expects to continue. A higher range of targets would be appropriate. “
In determining the pace of future increases in the target range, the Committee will take into account the accumulated tightening of monetary policy, the time frame in which monetary policy affects economic activity and inflation, and economic and financial developments.
“The September statement contained no paragraphs on changing the pace of rate hikes in the future.”
In addition, the committee will continue to reduce its holdings in Treasury, agency debt and agency mortgage-backed securities, as described in the “Federal Reserve Budget Reduction Plan” released in May. The committee has made a strong commitment to bring inflation back to its 2% target.
In assessing the appropriate monetary policy stance, the Committee will continue to monitor the implications of subsequent disclosure for the economic outlook and will be prepared to adjust the monetary policy stance as appropriate if risks arise that could hinder the achievement of its objectives. by the Committee. The committee’s assessment will take into account a wide range of information, including data on public health, labor market conditions, indicators of inflationary pressures and inflation expectations, and data on financial and international developments.
Supporting this monetary policy resolution are FOMC President Powell (Jerome Powell), Vice President John Williams (John Williams), Barr (Michael Barr), Bowman (Michelle Bowman), Branard (Lael Brainard), James Bullard cloth, Susan Collins, Lisa Cook, Esther George, Philip Jefferson, Loretta Mester and Christopher Waller.
