To Infinity … And Beyond! Fed Keeps Target Rate At 25 Basis Points And Commits To Infinite Monetary Stimulus (Powell As Buzz Lightyear)

(Bloomberg) — The Federal Reserve pledged to maintain at least the current pace of asset purchases and projected interest rates will remain near zero through 2022, as Chairman Jerome Powell committed the central bank to using all its tools to help the economy recover from the coronavirus.

“We’re not even thinking about thinking about raising rates,” he told a video press conference Wednesday. “We are strongly committed to using our tools to do whatever we can for as long as it takes.”

Yes, The Fed kept their target rate at 0.25 basis points but are not allowing negative rates.

The Fed Dots Project suggests higher rates in the future but not until 2022 .. and beyond!

In a separate Operating Policy note from the NY Fed, we read that:

  • the Desk plans to continue to increase SOMA holdings of Treasury securities at the current pace, which is the equivalent of approximately $80 billion per month

and:

  • the Desk plans to continue to increase SOMA holdings of agency MBS at the current pace, which is the equivalent of approximately $40 billion per month

Yes, Powell and The Fed are committed to printing money to infinity … and beyond!

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