9/20/2017, 8:00 PM (Source: TeleTrader)
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Fed: Balance sheet reduction starts in October

The Federal Open Market Committee (FOMC) decided on Wednesday to keep interest rates unchanged and to initiate the reduction of its $4.5 trillion balance sheet in October, according to the official statement.

Members of the Federal Reserve's policymaking panel agreed to maintain the target range for the federal funds rate at 1% to 1.25% and thus keep the stance of monetary policy accommodative. They indicated that future adjustments to the cost of borrowing in the US will depend on the expected and realized economic conditions relative to the central bank's objectives of maximum employment and 2% inflation.

Rate-setters also stated that the devastation caused by Hurricanes Harvey, Irma and Maria could temporarily raise inflation by boosting gasoline and other prices. Apart from that, inflation is expected to remain somewhat below 2% in the near term and to stabilize around the Committee's 2% objective over the medium term.

Baha Breaking News (BBN) / IB