InvestorQ : What were the key highlights of the FOMC announcement on 17 March during the FOMC meet?
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What were the key highlights of the FOMC announcement on 17 March during the FOMC meet?

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Aashna Tripathi answered.
3 weeks ago
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Here are some of the key announcements made by the Fed in the outcome of the meeting which concluded after two days of deliberations on 17 March.

· On 17 March, the Federal Open Markets Committee or FOMC of the US, opted to hold the Fed rate at the range of 0.00-0.25%

· The Fed also committed to continue its bond buying program at the current level of $120 billion and also increase it if required.

· The bond buying will consist of $80 billion of treasury securities and the balance $40 billion in agency backed mortgage securities.

· The FOMC decided to hold rates at 0.00%-0.25% till growth bounced back and the ill-effects of COVID were sufficiently, if not fully, eliminated.

· Fed has virtually assured the markets that that it would not tinker with rates till the end of 2023 and the policy would continue to basic till then.

· Fed would not only focus on headline inflation number but sustained average inflation of over 2.2% over a sustained period of time.

· The FOMC has also commented that the FOMC meet on 17 March was crucial as it came after one of the sharpest rallies in US bond yields.

· The 10-year benchmark yields on US bonds has already rallied from 0.51% to 1.74% giving a hint that the Fed may not be able to hold rates low despite its best intentions.

· The principal goal of the FOMC on 17 Mar was to ensure that the economy revived but higher levels of inflation and interest rates will not be conducive to that.

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