The Federal Open Market Committee (FOMC) announced on Wednesday that it left the benchmark interest rate, the target range for federal funds, unchanged at 0%-0.25% as widely expected. In its policy statement, the Fed noted that if progress continues toward employment and inflation goals broadly as expected, a moderation in the pace of asset purchases may soon be warranted.
Follow our live coverage of the FOMC decision and the market reaction.
Market reaction
The USD weakened modestly against its peers following the FOMC's policy announcements. As of writing, the US Dollar Index was down 0.12% on the day at 93.10.
Additional takeaways as summarized by Reuters
"Fed vote in favor of policy was unanimous."
"Indicators of economic activity and employment have continued to strengthen."
"Sectors most adversely affected by the pandemic have improved in recent months but the rise in COVID-19 cases has slowed their recovery."
"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."
"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%."
"Inflation is elevated, largely reflecting transitory factors."
"Path of the economy continues to depend on the course of the virus."
"Will continue to buy at least $80 billion/month of treasuries and $40 billion/month of mortgage-backed securities until ‘substantial further progress’ made on maximum employment, price stability goals, but that progress has been made."
"Progress on vaccinations will likely continue to reduce the effects of the public health crisis on the economy but risks to the economic outlook remain."
"Raised counterparty limit for overnight reverse repo facility to $160 billion per day from $80 billion effective September 23; other parameters unchanged."
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