At 2PM ET, The Fed kept the US interest rate unchanged at 0.25%, and released their statement, key findings:
Asset Purchases
The Fed announced that they have decided substantial further progress test for tapering asset purchases has been met. They are to reduce Treasury purchases by $10 billion and mortgage-backed securities purchases by $5 billion in the months of November and December. The NY Fed markets desk is to adjust open market purchases of treasuries to $70 bln/month of treasuries, $35 bln/month of MBS starting in mid-November.
Furthermore, they add that comparable decreases in buying pace are likely reasonable each month, but we are willing to adapt if necessary, and state that similar decreases in buying speed are likely appropriate each month, but still are willing to adapt.
Recovery
The Fed reiterated that the increase of COVID-19 cases this summer hampered the recovery of industries harmed by the pandemic, and the path of the economy is still determined by the path of the virus. Nonetheless, economic activity and employment have continued to improve.
Inflation
The recent increase in inflation is largely transitory, according to the Fed statement.
Supply and demand imbalances caused by the pandemic have contributed to significant price rises in several sectors.
