Now Reading
The Federal Reserve to release interest rate decision


The Federal Reserve to release interest rate decision

Federal Reserve
Photo: Gary Cameron/ Reuters

The United States Federal Reserve’s Federal Open Market Committee (FOMC) will conclude its first meeting of 2021 today.

The central bank is expected to leave its benchmark rate untouched at 0.25% as the country’s economic prospects remain uncertain following the recent acrimonious transfer of executive power and ongoing resurgence of COVID-19 infections. Additionally, the bank’s bond buying program, totaling $120 billion per month, will remain unchanged given the lack of advance warning of a change by Fed policymakers—an indicator the FOMC said investors and policymakers could expect before any major actions.

The FOMC and Chairman Jerome Powell are likely to see an ally in President Joe Biden and freshly appointed Treasury Secretary Janet Yellen. Powell has repeatedly called for additional fiscal aid to complement the bank’s actions—a plea Biden has answered with his proposed $1.9 trillion aid package. Expect a close alignment between monetary and fiscal policy in the short- and medium-term as Powell and Yellen work to limit long-lasting scarring of the economy. Furthermore, expect a loose monetary policy environment until the central bank confirms unemployment has fallen dramatically and greater vaccination numbers allow more diverse business activity to be conducted.

See Also
Photo: Navy Petty Officer 1st Class Dominique A. Pineiro

Wake up smarter with an assessment of the stories that will make headlines in the next 24 hours. Download The Daily Brief.

View Comments (0)

Leave a Reply

Your email address will not be published.

Scroll To Top