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The Federal Reserve kept things fairly status quo in their most recent statement at the conclusion of a 2-day meeting of the Federal Open Market Committee. Moreover, at least in terms of short-term rates, there are no plans to stray in the near future.

If you’re looking for takeaways, the biggest thing is probably that the moves of the Fed are helping keep mortgage rates lower than they would be otherwise. If you’re in the market, rates are still very low and it’s a great time to apply for a mortgage if you’re ready.

My analysis of the Fed statement is below in bold.

The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals.

Everybody’s doing their bit to get through the issues caused by COVID-19. The Federal Reserve is doing its part to support the economy in its continued recovery. This is becoming boilerplate, but that doesn’t mean it should be overlooked. It’s at least a little bit reassuring.

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. Inflation continues to run below 2 percent. 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.

This is traditionally a look-back paragraph that informs on what the Fed is thinking about when the Committee sets policy. After a brief step back in January, things again seem to be looking up for the economy, although the healing is going slower in some of the sectors most affected by COVID-19.

Inflation is still running below the Fed’s 2% goal. The Fed would actually like to see 2% inflation because it would encourage people to buy now, which can stimulate the economy. Meanwhile, the committee believes policy decisions are helping the economy based on the amount of access to credit for people and businesses.

The path of the economy will depend significantly on the course of the virus, including progress on vaccinations. The ongoing public health crisis continues to weigh on economic activity, employment, and inflation, and poses considerable risks to the economic outlook.

Vaccinations remain heavily on the mind of the Committee. The theory being the faster we can vaccinate the majority of the population, the sooner we can start and move toward normal activity. Until that happens, the economic outlook is uncertain. This is also capping employment at levels below normal and keeping a lid on inflation because spending is lower.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With inflation running persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer‑term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved. The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent 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 percent and is on track to moderately exceed 2 percent for some time. In addition, the Federal Reserve 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 has a tendency to pack a lot into this paragraph. I’m going to cover in three or four paragraphs what they’ve done in one. Chairman Powell, readability is a thing. Give me a call.

First, they left short-term interest rates near zero. This is good for mortgage rates and those of many other financial products that tend to follow the directionality of short-term rates.

Beyond that, they say they expect to leave rates at low levels until inflation has run above 2% for some time in order to make up for lost time. In fact, short-term rates aren’t expected to be above 0.1% before 2023, according to the projections released alongside this announcement.

Moreover, the Federal Reserve plans to continue buying $40 billion worth of agency mortgage-backed securities. This is going to have the effect of keeping mortgage rates lower than they otherwise would be for a while because they haven’t defined an end date yet. The bottom line is that until things are back to normal, they want to support the flow of credit in any way they can. There, four paragraphs.

In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on public health, labor market conditions, inflation pressures and inflation expectations, and financial and international developments.

The Fed always closes by pulling back the curtain on the data it looks at in making its policy decisions. While COVID-19 continues to be the biggest threat in general with all the unknown that has driven what the committee has done recently, members are also looking at general employment data as well as what’s putting pressure on prices along with national and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Thomas I. Barkin; Raphael W. Bostic; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Mary C. Daly; Charles L. Evans; Randal K. Quarles; and Christopher J. Waller.

Everybody agreed.

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