Fed leaves policy settings unchanged in June as expected
|The Federal Open Market Committee (FOMC) on Wednesday announced that it left the benchmark interest rate, the target range for federal funds, unchanged at 0%-0.25% as widely expected.
Follow our live coverage of the FOMC decision and the market reaction.
Market reaction
Although the Fed left its policy settings unchanged, the hawkish shift seen in the Summary of Economic Projections seems to be providing a boost to the greenback. As of writing, the US Dollar Index was up 0.48% on a daily basis at 90.95.
Key takeaways from policy statement as summarized by Reuters
"Will continue to buy at least $80 bln/month of treasuries and $40 bln/month of mortgage-backed securities until ‘substantial further progress’ made on maximum employment, price stability goals."
"Will maintain current fed funds rate until labor market has reached maximum employment and inflation has risen to 2% and is on track to moderately exceed that for some time."
"Indicators of economic activity and employment have strengthened amid progress on COVID-19 vaccinations."
"Will maintain accommodative policy until inflation runs moderately above 2% for some time, so that inflation averages 2% over time and longer-term inflation expectations remain well-anchored at 2%."
"Sectors most adversely affected by pandemic remain weak but have shown improvement."
"Path of economy depends significantly on course of the virus."
"Vote in favor of policy was unanimous."
"Temporary US dollar swap lines extended with 9 central banks through Dec. 31."
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