April 28th FOMC Follow-Up

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  • Today the FOMC voted to keep the Fed Funds target rate unchanged within the 0.00% to 0.25% range.
  • This outcome was widely expected, and the committee members voted unanimously in favor of the action.


  • Language around the Fed’s average inflation-targeting approach remained unchanged from recent meetings, again noting the Fed will “aim to achieve inflation moderately above 2 percent for some time…”
  • The Fed’s statement removed language regarding the health crisis weighing on inflation. The statement also noted that inflation has risen, but largely attributed this to transitory factors. As discussed further in the Press Conference, these transitory factors are primarily base effects, very low March and April numbers from last year falling off the 12-month calculation, and supply chain bottlenecks, issues that by their nature are temporary and expected to be resolved, although the timing for resolving these issues is uncertain.
  • In the Q&A following Chairman Powell’s prepared remarks, Powell indicated that breakeven rates are at levels that are consistent with their mandate, however the Fed will adhere to their stated objectives and not react based on a single data point or estimates.

Monetary Policy Implementation

  • There were no changes to the language surrounding asset purchases, which will continue at the previously established levels of $80 billion per month for Treasury securities and $40 billion per month for agency mortgage-backed securities.
  • Throughout the Press Conference, Powell repeatedly stated that it is not time for tapering yet and that it will likely take some time before they see substantial further progress. Powell clarified that while recent reports have been good, they “don’t come close to substantial further progress.”

Economic Conditions

  • Today’s statement continued to highlight the strengthening economy but noted that the “health crisis continues to weigh on the economy, and risks to the economic outlook remain.”
  • During the Press Conference, Powell stated that the labor market has continued to improve, notably in pandemic-hit areas such as leisure and hospitality.

The FOMC is next scheduled to meet June 15 – 16, 2021. The June meeting will include an updated summary of economic projections.


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