The FOMC meeting concluded today, and the Federal Reserve released a statement along with a press conference from the Fed Chairman Jerome Powell. The clarity in regards to the details of the Fed’s revamped monetary policy that market participants had waited for was answered.
The statement released by the Federal Reserve began by saying, “The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals.
While the Federal Reserve has gone to great lengths to convey that they are in this for the long run, and will do whatever it takes, it was the release of the September “dot plot” which gave market participants the greatest amount of clarity.
The Federal Reserve made it crystal clear that it will keep its revised monetary policy of interest rates near zero and expects this action will continue until two events occur. First that the labor market conditions return to “maximum employment,” and secondly raise rates only after inflation has risen to 2% and “it is on track to moderately exceed 2% for some time.”