The Federal Open Market Committee (FOMC), the chief policy-setting body with the US Federal Reserve System, held its latest reserve meeting on 15th June 2021 and 16th June 2021. On Wednesday (June 16, 2021), the Federal Reserve concluded its two-day meeting. The meeting ended with higher expectations for inflation in 2021.
On noteworthy decided change is that FOMC members had projected that the federal funds' rates would be raised to an average of 0.3% in 2023, which is at 0.1% currently.
The FOMC has released its statement at 2 pm EST on June 16, 2021, and in the aftermath, the response of the market has been muted as of 3:05 pm EST the S&P 500 Index was done by 0.64% from its open. S&P 500 and Nasdaq Composite’s stocks were at 0.4% and 0.1% respectively.
Chairman Powell said that the Central bank is monitoring economic data and has not made any decision related to its bond purchase. He said, “You can think of its meeting that we had as the ‘talking about talking about’ meeting if you had like. I now suggest that we retire that time term, which has served its purpose.”
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Highlights of June 2021 FOMC Statement:
The FOMC remained committed to promoting “maximum employment and price stability.”
The FOMC still attributed the inflation rise largely to ‘transitory factors’.
It also stated that it would “maintain an accommodative stance of monetary policy as long as inflation averages two percent over time and longer-term inflation expectations remain well-anchored at two percent.”
It further stated that the FOMC would keep the federal funds rate unchanged at a range between 0% to 0.25%.