Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Fed Keeps Rates Steady; Monitoring Progress on Taper Threshold

EconomyJul 28, 2021 02:47PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Yasin Ebrahim

Investing.com - The Federal Reserve kept interest rates steady on Wednesday, and hinted that it would be keeping a closer eye on progress toward its threshold to start tapering monthly bond purchases at upcoming meetings.  

The Federal Open Market Committee left its benchmark rate unchanged in the range of 0% to 0.25% and said it would continue its $120 billion monthly bond purchases.

The Fed has faced calls from within its ranks to bring forward the timeline on tightening monetary policy in the wake of rising inflation. Those calls appear to be hitting home as the Federal Reserve indicated that it will be keeping a closer eye on the economic progress needed to begin trimming its bond purchases.   

"Last December, the Committee indicated that it would continue to increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgage‑backed securities by at least $40 billion per month until substantial further progress has been made toward its maximum employment and price stability goals.," The Fed said in its statement. "Since then, the economy has made progress toward these goals, and the Committee will continue to assess progress in coming meetings."

"[FOMC] participants expected that economy will continue to move our standard of substantial further progress [...] the timing and change of our asset purchases will depend on incoming data," Powell said in a press conference. "We have some ground to cover on the labor market side," Powell said, in response to a question to elaborate on substantial further progress.  

A recovery in the labor market appears to be at the heart of the Fed’s taper threshold. But sentiment on the recovery in the labor market and broader market has suffered a blow with the resurgence in Covid-19 cases brought on by the delta variant and a slowing vaccination rates.

The Fed doesn't appear to be as fixated as some on Wall Street concerning the economic impact from rising U.S. Covid-19 cases nor the slowing vaccination rates. "Progress on vaccinations will likely continue to reduce the effects of the public health crisis on the economy, but risks to the economic outlook remain," the Fed said.

"We don't have a strong sense how that [Delta variant] will work out, [but] there has been less economic implications from each Covid wave. [W]e will continue to monitor it carefully," Powell said.

Goldman Sachs (NYSE:GS) recently downgraded its U.S. growth forecasts, estimating a deceleration over the next year and a half that would see the U.S. economy return to expansion of 1.5% to 2% in the second half of next year. 

Powell continued to downplay inflation concerns, saying that the overshoot in inflation above the Fed's 2% target can be tied to "handful of categories," and reiterating that inflation "should move down over time."

Fed Keeps Rates Steady; Monitoring Progress on Taper Threshold
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (17)
Hanif Islam
Hanif Islam Jul 28, 2021 11:41PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
body shell
Jokers R Us
Jokers R Us Jul 28, 2021 6:36PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Lol
jideofor robinson
jideofor robinson Jul 28, 2021 4:25PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
WOW
Alexey Yanshin
Alexey Yanshin Jul 28, 2021 2:59PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
As I understand, decreasing bond purchase by FED will decrease liquidity on the market and thus will stop inflation.
Jan Buyle
Jan Buyle Jul 28, 2021 2:59PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Not correct. Decreasing bond purchase means the liquidity will still grow, but at a smaller paste than it does now, because decreasing bond purchase is still a purchase... Inlation is here to stay, maybe even stagflation... and the FED has not many options...
Daniel blade
Daniel blade Jul 28, 2021 2:59PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
bond purchase sounds like masking rotten economics fundemental.and keep yield flat. so that more credits go to stock market. no one knows how bad the economy is.
Ciprian Gal
Ciprian Gal Jul 28, 2021 2:59PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
and so return to value like energy, financials, pharma is a the right long term bet, not forth, like cyclicals. if fed wants consistent inflation above 2% long term, he needs to push price expections to higher levels than prior pandemic, this the base economic level will move to a higher equilibrium with higher potential, this achieving it's targets.
Njato Andrianina
Njato Andrianina Jul 28, 2021 2:56PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
can someone explain more about the news please
Jide Ononuju
Jide Ononuju Jul 28, 2021 2:46PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
market would misbehave a little but long term USD is still strong, a thriving economy
Daniel blade
Daniel blade Jul 28, 2021 2:46PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
that's not true. USD is completely toilet paper!
Suman Banerjee
Suman Banerjee Jul 28, 2021 2:37PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
what happens with bank nifty 29th expiry
MK MK
MK MK Jul 28, 2021 2:30PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Super fools
irshad ali
irshad ali Jul 28, 2021 2:30PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Gold waterfall expected
Bill Ackman
Bill Ackman Jul 28, 2021 2:24PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Lets see how long powell can fool the currency markets while not pricking the stock bubble
Juan David Villamarin
Juan David Villamarin Jul 28, 2021 2:24PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
🤣
Nathan Thurai
Nathan Jul 28, 2021 2:24PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Are you bet on bearish ?
High Grade
High Grade Jul 28, 2021 2:20PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
people out here looking for trade signals🤣🤣 look at the charts and get the know how
Cassius Stone
Cassius Stone Jul 28, 2021 2:20PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
exactly. it's all in the charts. just sit back and let the news play out pushing price into accumulations of orders and fade.
jason xx
jason xx Jul 28, 2021 2:20PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
what do u see in the charts?
jason xx
jason xx Jul 28, 2021 2:20PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
spx 4100?
Jp Perth
Jp Perth Jul 28, 2021 2:18PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
powell is a lawyer NOT an economist he completely full of lies. We are going to all suffer the damage of his greed.
Jokers R Us
Jokers R Us Jul 28, 2021 2:18PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Hes a puppet. The men behind the curtain are the real criminals.
Hien Hoang
Hien Hoang Jul 28, 2021 2:18PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Jokers R Us you know who they are?
chintan shah
chintan shah Jul 28, 2021 2:16PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
all eyes 👁️ on China 🇨🇳
Njato Andrianina
Njato Andrianina Jul 28, 2021 2:15PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
so it is good for the USD? beginner here
Cassius Stone
Cassius Stone Jul 28, 2021 2:15PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I don't know much about fundamentals so I would also like to know.
Steve Uzor
Steve Uzor Jul 28, 2021 2:15PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
dovish action from the feds... dollar falls... il
Alireza Torabi
Alireza Torabi Jul 28, 2021 2:15PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
what happend to us dollar?
Gajendra Suryawanshi
Gajendra Suryawanshi Jul 28, 2021 2:13PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
May be Bullish....$
Kevin Teoh
Kevin Teoh Jul 28, 2021 2:13PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Gold will be drop?
Emran Khatri
Emran Khatri Jul 28, 2021 2:13PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Gold is Bullish, not dollar
Elmer Fudd
Elmer Fudd Jul 28, 2021 2:12PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
They're thinking about thinking about tapering
TheEnd IsNigh
TheEnd IsNigh Jul 28, 2021 2:12PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
We're super serious about it this time, guys!
Totaltwo Sam
CryptoSam Jul 28, 2021 2:12PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email