Federal Funds Rate Remains Unchanged… For the Time Being
Fed Holds Rates Steady
The Federal Open Market Committee (FOMC) ended its two-day meeting on Wednesday (1-26-22) and announced that it had decided not to raise the Fed Funds Rate for the time being. The FOMC cited solid job gains and a decline in the unemployment rated as the reason for keeping the target range for the federal funds rate at 0 to 1/4 percent.
A statement released by the FOMC at the end of the two-day meeting said, “With inflation well above 2%, and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate. The Committee decided to continue to reduce the monthly pace of its net asset purchases, bringing them to an end in early March.”
Beginning in February, the FOMC plans to increase its holdings of Treasury Securities by at least $20 billion per month and of agency mortgage‑backed securities (MBS) by at least $10 billion per month.
“The Federal Reserve’s ongoing purchases and holdings of securities will continue to foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses,” said the FOMC.
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