Fed ends rate hike campaign
MONTHLY MARKET COMMENTARY |
As widely expected, Federal Reserve officials left the federal funds rate unchanged at their January meeting to a range of 2.25 to 2.50 percent. In his press conference, Fed Chair Jerome Powell cited mounting pressures on the economic growth outlook and tighter financial conditions beginning in the fourth quarter of last year as reasons for policymakers to opt for a wait-and-see approach.
Fed policymakers did not change balance sheet normalization policy but said they would provide further guidance on the pace of balance sheet reduction program and the appropriate size of the balance sheet at future policy meetings. In short, Fed officials are comfortable maintaining a larger balance sheet going forward.