Powell: Unless the economic outlook changes, monetary policy is still suitable for Powell: The Federal Reserve may consider buying interest-bearing bonds when necessary. The Fed keeps interest rates unchanged, and hints that in the case of a healthy economy, 2020 will remain unchanged throughout the year and in the election Keep watching. The Federal Open Market Committee issued a statement on Wednesday saying: "The Commission believes that the current monetary policy stance is appropriate to support the continued expansion of economic activity, a strong labor market, and the Federal Reserve to maintain interest rates unchanged, and imply that in the case of a healthy economy, 2020 The whole year will stay on its feet and stay on the sidelines during the general election year.
The Federal Open Market Committee issued a statement on Wednesday saying: "The Commission believes that the current monetary policy stance is appropriate to support the continued expansion of economic activity, a strong labor market, and push inflation closer to the Commission's symmetrical target of 2%.
The 10-year U.S. Treasury yield fell below 1.8%, the yuan fell, and the U.S. stock market edged higher. Investors are digesting the Fed ’s interest rate statement and Powell ’s press conference. Among them, Powell observes that the Fed may consider expanding the purchase of treasury bonds related to reserve management and include interest-bearing treasury bonds if necessary to ease the pressure on liquidity in the currency market.
This is the first time that the Federal Reserve has voted unanimously since May. The Fed stated that it will continue to monitor economic data to observe changes in the economic outlook, "including the global development situation and sluggish inflationary pressures." Officials also removed statements about "uncertainty" about the economic outlook.
Powell told reporters that if the next economic data can continue to confirm the Fed's economic outlook, the current monetary policy stance may still be appropriate. "The current economic and monetary policy positions are in good shape," he said.
After three consecutive interest rate cuts to alleviate concerns over the economic slowdown, the market generally predicts that the Federal Reserve will keep the federal funds rate target range unchanged at 1.5-1.75%. Although China and the United States have not yet reached a trade agreement, the prospect of Brexit ahead of Thursday ’s election is doubtful, and the global economic outlook is sluggish, officials predict that monetary policy will still support economic growth in the next few years. In a statement, the Federal Open Market Committee reiterated that economic activity has been growing at a "moderate" rate and employment growth has been "steady." The record-breaking US economic expansion has entered its 11th year. This trend has pushed unemployment to its lowest level since 1969, but the inflation rate has not continued to reach the Federal Reserve's target of 2%.
Officials also released new quarterly forecasts:
By the end of 2020, the median estimated federal funds rate is 1.6%, 1.9% in 2021 and 2.1% in 2022. Thirteen officials expected interest rates to remain unchanged next year, and four officials considered it appropriate to raise interest rates.
It is expected that by the end of 2020, the unemployment rate will reach 3.5%, which is the same as the current level. The long-term unemployment rate is expected to be 4.1%, lower than the 4.2% forecast in September. The economy is expected to grow by 2% in 2020 and 1.9% in 2021, both in line with the previous forecast. It is expected that the inflation rate in 2021 will reach 2%, which is the same as the previous forecast.
Although factory activity indicators point to an economic downturn in this area, Fed officials said they believe that consumer spending will continue to drive economic growth. American wages are growing faster than inflation, employers continue to increase jobs, and nonfarm payrolls increased by 266,000 in November. Economists surveyed by Bloomberg predict that US economic growth will slow down next year, but it is still close to a long-term trend.
