Text of the Fed’s September monetary policy statement


To be released at 2 p.m. EDT September 22, 2021 The Federal Reserve has pledged to use its full range of tools to support the U.S. economy during these difficult times, promoting its maximum employment and price stability goals. Thanks to progress in immunization and strong political support, economic activity and employment indicators continued to strengthen. The sectors most affected by the pandemic have improved in recent months, but the increase in COVID-19 cases has slowed their recovery. Inflation is high, largely reflecting transient factors. Overall, financial conditions remain accommodative, partly reflecting policy measures aimed at supporting the economy and the flow of credit to US households and businesses. The trajectory of the economy continues to depend on the evolution of the virus. Advances in immunization are likely to continue to reduce the effects of the public health crisis on the economy, but risks to the economic outlook remain. The Committee seeks to achieve a maximum employment and inflation rate of 2% in the longer term. As inflation has remained below this longer-term target, the Committee will aim to maintain inflation just above 2% for a period of time, such that inflation averages 2% over time and that long-term inflation expectations remain firmly anchored at 2%. The Committee expects to maintain an accommodative monetary policy until these results are achieved. The Committee has decided to maintain the target range for the federal funds rate at 0 to 1/4 percent and expects it to be appropriate to maintain this target range until labor market conditions. have reached levels consistent with (continued) For release at 2 p.m. EDT September 22, 2021 -2- Peak employment and inflation estimates have risen to 2 percent and are on track to moderately exceed 2 percent for a certain time. Last December, the Committee said it would continue to increase its holdings of treasury securities by at least $ 80 billion per month and agency mortgage-backed securities by at least $ 40 billion. per month until further substantial progress is made towards its maximum employment and price stability goals. Since then, the economy has progressed towards these goals. If progress continues overall as planned, the Committee believes that a moderation in the pace of asset purchases could soon be justified. These asset purchases help promote smooth functioning of markets and supportive financial conditions, thereby supporting the flow of credit to households and businesses. In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of the information received for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy if necessary if risks arose that could impede the achievement of the Committee’s objectives. The Committee’s assessments will take into account a wide range of information, including readings on public health, labor market conditions, inflationary pressures and inflation expectations, and financial and international developments. Jerome H. Powell, chairman, voted for monetary policy action; John C. Williams, vice-president; Thomas I. Barkin; Raphaël W. Bostic; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Mary C. Daly; Charles L. Evans; Randal K. Quarles; and Christopher J. Waller. -0- To be released at 2 p.m. EDT on September 22, 2021 Decisions Regarding the Implementation of Monetary Policy The Federal Reserve has taken the following decisions to implement the monetary policy direction announced by the Federal Open Market Committee in his statement of September 22, 2021: The Board of Governors of the Federal Reserve System voted unanimously to keep the interest rate paid on reserve balances at 0.15%, effective September 23, 2021. • In As part of its policy decision, the Federal Open Market Committee voted to authorize and direct the Open Market Desk at the Federal Reserve Bank of New York, until instructed otherwise, to execute trades on the open system account. market in accordance with the following national policy directive: “As of September 23, 2021, the Federal Open Market Committee directs the Desk to: o Undertake open market operations as necessary to maintain the rate of f Federal waves in a target range of 0 to 1/4%. o Increase the open market system Account holdings of treasury securities of $ 80 billion per month and agency mortgage-backed securities (MBS) of $ 40 billion per month. o Increase holdings of Treasury securities and agency MBS by additional amounts and purchase agency commercial mortgage backed securities (CMBS) as necessary to keep markets for these securities functioning properly. o Carry out overnight buyback operations with a minimum bid rate of 0.25% and with an overall transaction limit of $ 500 billion; the overall operating limit may be temporarily increased at the discretion of the president. o Carry out overnight reverse repurchase transactions at an offer rate of 0.05% and with a counterparty limit of $ 160 billion per day; the limit per counterparty may be temporarily increased at the discretion of the President. o Renew all principal payments from Federal Reserve holdings of Treasury securities at auction and reinvest all principal payments from Federal Reserve holdings of agency debt and agency MBS into agency MBS. o Allow modest deviations from the amounts indicated for purchases and reinvestments, if necessary for operational reasons. o Engage in dollar and coupon exchange transactions as necessary to facilitate the settlement of Federal Reserve agency MBS transactions. the Federal Reserve voted unanimously to approve setting the primary lending rate at the current level of 0.25%. This information will be updated as necessary to reflect decisions of the Federal Open Market Committee or the Board of Governors regarding the details of the Federal Reserve operational tools and approach used to implement monetary policy. regarding open market operations and reinvestments can be found on the website of the Federal Reserve Bank of New York.


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September 22, 2021 at 2:14 p.m. ET (6:14 p.m. GMT)

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