Page 18 - THE SOUTH CHINA BUSINESS JOURNAL
P. 18
C. TODAY
Federal Reserve Raises Key
Rate by Half-Point to Fight
InflationVaccines
The Committee seeks to achieve maximum predictable manner primarily by adjusting the
employment and inflation at the rate of 2 amounts reinvested of principal payments
percent over the longer run. With appropriate received from securities held in the System Open
firming in the stance of monetary policy, the Market Account (SOMA). Beginning on June 1,
Committee expects inflation to return to its 2 principal payments from securities held in the
percent objective and the labor market to remain SOMA will be reinvested to the extent that they
strong. In support of these goals, the Committee exceed monthly caps.
decided to raise the target range for the federal
funds rate to 3/4 to 1 percent and anticipates 1. For Treasury securities, the cap will initially
that ongoing increases in the target range will be be set at $30 billion per month and after three
appropriate. In addition, the Committee decided months will increase to $60 billion per month. The
to begin reducing its holdings of Treasury decline in holdings of Treasury securities under this
securities and agency debt and agency mortgage- monthly cap will include Treasury coupon securities
backed securities on June 1, as described in and, to the extent that coupon maturities are less
the Plans for Reducing the Size of the Federal than the monthly cap, Treasury bills.
Reserve's Balance Sheet that were issued in
conjunction with this statement. 2. For agency debt and agency mortgage-backed
securities, the cap will initially be set at $17.5
In assessing the appropriate stance of monetary billion per month and after three months will
policy, the Committee will continue to monitor increase to $35 billion per month.
the implications of incoming information for
the economic outlook. The Committee would be • Over time, the Committee intends to maintain
prepared to adjust the stance of monetary policy securities holdings in amounts needed to
as appropriate if risks emerge that could impede implement monetary policy efficiently and
the attainment of the Committee’s goals. The effectively in its ample reserves regime.
Committee's assessments will take into account a
wide range of information, including readings on 1. To ensure a smooth transition, the Committee
public health, labor market conditions, inflation intends to slow and then stop the decline in the
pressures and inflation expectations, and financial size of the balance sheet when reserve balances
and international developments. are somewhat above the level it judges to be
consistent with ample reserves.
Voting for the monetary policy action were Jerome
H. Powell, Chair; John C. Williams, Vice Chair; 2. Once balance sheet runoff has ceased, reserve
Michelle W. Bowman; Lael Brainard; James Bullard; balances will likely continue to decline for a
Esther L. George; Patrick Harker; Loretta J. Mester; time, reflecting growth in other Federal Reserve
and Christopher J. Waller. Patrick Harker voted as liabilities, until the Committee judges that reserve
an alternate member at this meeting. balances are at an ample level.
Consistent with the Principles for Reducing the 3. Thereafter, the Committee will manage
Size of the Federal Reserve's Balance Sheet securities holdings as needed to maintain ample
that were issued in January 2022, all Committee reserves over time.
participants agreed to the following plans for
significantly reducing the Federal Reserve's • The Committee is prepared to adjust any of
securities holdings. the details of its approach to reducing the size
of the balance sheet in light of economic and
• The Committee intends to reduce the Federal financial developments.
Reserve's securities holdings over time in a
15 AMCHAM SOUTH CHINA
Federal Reserve Raises Key
Rate by Half-Point to Fight
InflationVaccines
The Committee seeks to achieve maximum predictable manner primarily by adjusting the
employment and inflation at the rate of 2 amounts reinvested of principal payments
percent over the longer run. With appropriate received from securities held in the System Open
firming in the stance of monetary policy, the Market Account (SOMA). Beginning on June 1,
Committee expects inflation to return to its 2 principal payments from securities held in the
percent objective and the labor market to remain SOMA will be reinvested to the extent that they
strong. In support of these goals, the Committee exceed monthly caps.
decided to raise the target range for the federal
funds rate to 3/4 to 1 percent and anticipates 1. For Treasury securities, the cap will initially
that ongoing increases in the target range will be be set at $30 billion per month and after three
appropriate. In addition, the Committee decided months will increase to $60 billion per month. The
to begin reducing its holdings of Treasury decline in holdings of Treasury securities under this
securities and agency debt and agency mortgage- monthly cap will include Treasury coupon securities
backed securities on June 1, as described in and, to the extent that coupon maturities are less
the Plans for Reducing the Size of the Federal than the monthly cap, Treasury bills.
Reserve's Balance Sheet that were issued in
conjunction with this statement. 2. For agency debt and agency mortgage-backed
securities, the cap will initially be set at $17.5
In assessing the appropriate stance of monetary billion per month and after three months will
policy, the Committee will continue to monitor increase to $35 billion per month.
the implications of incoming information for
the economic outlook. The Committee would be • Over time, the Committee intends to maintain
prepared to adjust the stance of monetary policy securities holdings in amounts needed to
as appropriate if risks emerge that could impede implement monetary policy efficiently and
the attainment of the Committee’s goals. The effectively in its ample reserves regime.
Committee's assessments will take into account a
wide range of information, including readings on 1. To ensure a smooth transition, the Committee
public health, labor market conditions, inflation intends to slow and then stop the decline in the
pressures and inflation expectations, and financial size of the balance sheet when reserve balances
and international developments. are somewhat above the level it judges to be
consistent with ample reserves.
Voting for the monetary policy action were Jerome
H. Powell, Chair; John C. Williams, Vice Chair; 2. Once balance sheet runoff has ceased, reserve
Michelle W. Bowman; Lael Brainard; James Bullard; balances will likely continue to decline for a
Esther L. George; Patrick Harker; Loretta J. Mester; time, reflecting growth in other Federal Reserve
and Christopher J. Waller. Patrick Harker voted as liabilities, until the Committee judges that reserve
an alternate member at this meeting. balances are at an ample level.
Consistent with the Principles for Reducing the 3. Thereafter, the Committee will manage
Size of the Federal Reserve's Balance Sheet securities holdings as needed to maintain ample
that were issued in January 2022, all Committee reserves over time.
participants agreed to the following plans for
significantly reducing the Federal Reserve's • The Committee is prepared to adjust any of
securities holdings. the details of its approach to reducing the size
of the balance sheet in light of economic and
• The Committee intends to reduce the Federal financial developments.
Reserve's securities holdings over time in a
15 AMCHAM SOUTH CHINA
