Federal Reserve officials scaled back their projected interest-rate increases this year to zero and said they would end the drawdown of the central bank’s bond holdings in September after holding policy steady on Wednesday.
In a separate statement Wednesday, the Fed said it would start slowing the shrinking of its balance sheet in May and halt the drawdown altogether at the end of September. After that, the Fed will likely hold the size of the portfolio “roughly constant for a time,” which will allow reserve balances to gradually decline.
While the central bank is very close to its twin goals of low and stable inflation and full employment, Chairman Jerome Powell and his colleagues must contend with risks from abroad, including slowing growth in Europe and China and possible spillovers from Britain’s exit from the European Union. Economic growth “has slowed from its solid rate in the fourth quarter,” the FOMC said in its statement. “Job gains have been solid, on average, in recent months” despite “little changed” payrolls in February. “Overall inflation has declined,” though excluding food and energy it “remains near 2 per cent,” the central bank said.
The projections showed 11 of 17 officials saw no hikes this year, while four expected one rate increase and two people projected two hikes. Policymakers expect to lift rates once in 2020, to 2.6 per cent by the end of that year, and hold them steady in 2021.
Loans Loans Latest News, Loans Loans Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: nationalpost - 🏆 10. / 80 Read more »
Source: globeandmail - 🏆 5. / 92 Read more »