WASHINGTON–As expected, the Federal Reserve’s Open Market Committee has adjourned its two-day meeting without making any changes to rates—but it did indicate it sees brighter economic days ahead.
“The COVID-19 pandemic is causing tremendous human and economic hardship across the United States and around the world. Following a moderation in the pace of the recovery, indicators of economic activity and employment have turned up recently, although the sectors most adversely affected by the pandemic remain weak,” the Fed said. “Inflation continues to run below 2%. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.
“The path of the economy will depend significantly on the course of the virus, including progress on vaccinations,” the FOMC statement continued. “The ongoing public health crisis continues to weigh on economic activity, employment, and inflation, and poses considerable risks to the economic outlook.”
As it has following recent meetings, the Fed said that with inflation below its 2% goal it will endeavor to achieve inflation moderately above 2% for some time so that inflation averages 2% over time and longer‑term inflation expectations remain well anchored at 2%.
“The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved,” it said.
Target Range Unchanged
As a result, the FOMC said it is keeping the target range for the federal funds rate at 0% to .25% and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee's assessments of maximum employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time.
In addition, the Federal Reserve said it will 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 the Committee's maximum employment and price stability goals.
“These asset purchases help foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses,” the Fed said.
With over 50 years of experience in the credit union sector, I have had the privilege of observing and participating in its evolution from various vantage points. My journey has taken me from serving as a dedicated volunteer holding critical leadership roles, including serving on the supervisory committee, as director, and as board chairman, culminating in my tenure as CEO for 12 years and now founder and President/CEO of the National Council of Firefighter Credit Unions . This extensive background has enabled me to " Sit On Both Sides Of The Desk ," blending operational expertise with strategic oversight. In this blog post, I want to share how this dual perspective has enriched my understanding of credit union dynamics and fostered more effective governance. By leveraging the insights gained from years spent navigating both the intricacies of daily operations and the broader strategic objectives, I have witnessed firsthand the transformative power of collaboration, communi...
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