The information received after the meeting of the Federal Committee on Open Markets in December suggests that the labor market remains strong and that economic activity is gradually growing. Jobs have grown steadily on average in recent months, while the unemployment rate has remained low. Although household spending grew, investment in fixed assets and exports remained weak where the total inflation fell below two percent for the current year. The Committee believes that the current position of monetary policy is suitable to support sustained growth in economic activity and keep inflation at a level not exceeding 2%.
Decisions regarding the implementation of monetary policy:
The Board of Governors of the Federal Reserve System voted unanimously to set the interest rate on the mandatory and excess reserve balance at 1.60% starting January 30, 2020.
"Starting January 30, 2020, the Federal Committee for Open Markets instructs the Department to conduct operations on the open market as necessary to maintain the federal funds rate in the target range of 1 1 / 2 to 1 3 / 4 percent. The Committee instructs the Office to continue the procurement of treasury bills at least in the second quarter of 2020 to maintain a sufficient reserve level that prevailed in the early stages. The Committee also instructs the Office to participate in dollar coupon exchange and coupon exchange operations, as necessary, to facilitate settlements on Federal Reserve transactions with mortgage-backed securities. "
In this regard, the Board of Governors of the Federal Reserve System unanimously voted to approve the establishment of the primary loan rate at the existing level of 2.25 percent. This information will be updated as necessary to reflect the decisions of the Federal Open Market Committee or the Board of Governors regarding the details of the Federal Reserve's operational instruments and the approach used to implement monetary policy.
The Monetary policy action was voted by the following: Chair Jerome H. Powell, Vice Chairman John C. Williams, Michelle W. Bowman, Lael Brainard, Richard H. Clarida, Patrick Harker, Robert S. Kaplan, Neel Kashkari, Loretta J. Mester, and Randal C. Quarles.
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