Fed adds $45 billion in Treasury buys, as expected

Author: Adam Button | Category: Central Banks
  • Purchases in addition to $40 billion/month in MBS
  • Total QE raised to $85 billion/month, as expected
  • Fed drops calendar guidance, adopts economic thresholds
  • Rates to stay exceptionally low “at least as long as” unemployment below 6.5%
  • Rates to stay low with inflation expected at 2.5% or less
  • Will also consider other data on employment, inflation and financial developments in decisions
  • Expects highly accommodative policy will remain appropriate for considerable time after asset purchases end
  • Lacker dissented, opposing purchases
  • Repeats that economy “continued to expand at a moderate pace”
  • Full statement

A change in rhetoric that doesn’t amount to much. Risk assets a bit stronger, USD weaker despite a selloff in bonds.