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As this analysis was coming out, I heard one Federal Reserve watcher say they counted only seven words that were different between the Federal Reserve’s November statement and its last one. With the vote still being counted, it’s clear that the committee wanted to avoid making any waves.

Fortunately, a lot of the same is good news if you’re in the market for a mortgage. Low rates have been the name of the game for a while and nothing about this statement changes that. If you’re in the market for a mortgage, it’s not a bad time to take advantage and lock your rate. Elections have a tendency to sometimes move markets.

My analysis of the statement is in bold below.

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.

This seems to be a template statement in the age of the ongoing COVID-19 situation, but it’s good to see that the Committee will do whatever it can within its mandate to support the functioning of the economy while we get a handle on the virus.

The COVID-19 pandemic is causing tremendous human and economic hardship across the United States and around the world. Economic activity and employment have continued to recover but remain well below their levels at the beginning of the year. Weaker demand and earlier declines in oil prices have been holding down consumer price inflation. 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.

COVID-19 is having a negative effect on both the health of the nation and the economy in general. Although there’s been some bounce back, there’s no doubt that activity in the economy is below where it was in February by quite a bit. That said, the Federal Reserve here commits to policies that will support economic recovery, including helping both consumers and businesses. It sees that trend continuing.

The Federal Reserve continues to be disappointed by consumer inflation, but they see weaker demand for gas as a culprit. It’ll be interesting to track what happens the remainder of the year because COVID-19 may put a damper on the usual thought that there’s “no place like home for the holidays.” If people don’t travel, that would be bad for gas demand.

The path of the economy will depend significantly on the course of the virus. The ongoing public health crisis will continue to weigh on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term.

This is the point in the statement where we’ve gotten quite used to seeing the fact that the outlook for the economy and indicators such as jobs numbers and inflation have been and will continue to be tied to the course of the virus. You could make an argument that public health is the new most important economic bellwether.

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, over coming months the Federal Reserve will increase its holdings of Treasury securities and agency mortgage-backed securities at least at the current pace to sustain smooth market functioning and help foster accommodative financial conditions, thereby supporting the flow of credit to households and businesses.

If you’re of a certain age, you’ll remember being a kid and fast-forwarding the tape to your favorite song or your favorite part of the movie. If this statement were played back via VCR, investors would fast-forward to this paragraph.

The Committee chose to leave short-term interest rates where they are. Because short-term rates tend to follow the same general trend as longer-term rates for things like mortgages, this means mortgage rates are likely to stay put at their current low levels.

The reasoning for keeping rates where they are is that the Federal Reserve would like to see inflation pick up quite a bit. If consumers think that prices will rise in the near term, they’ll be more likely to purchase now rather than waiting. This has the effect of giving the economy a boost because more goods and services are produced to meet the demand.

Because the inflation rate has run so low for so long, the Committee has indicated that it would be fine with catch-up inflation. Under this policy, inflation could run a fair amount above the 2% annual goal that the Committee has without the Fed raising rates, thereby making up for an extended period of time when prices have been essentially flat.

There’s a lot in this one paragraph, but the last thing that the Fed promises is that it’ll buy more mortgage-backed securities (MBS). Because mortgage rates are at least partly determined by the yield on these securities, more demand from the Fed is a good thing for the mortgage market.

More buyers of these bonds mean that the yield can be lower and still attract a buyer, which keeps interest rates lower.

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.

At the end of these statements, the Fed always gives a peek behind the curtain at the economic indicators they care about. In this case, the situation with the virus is paramount as are conditions surrounding employment and prices. Finally, they’ll be eyeing developments in the markets both in the U.S. and internationally.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Mary C. Daly; Patrick Harker; Robert S. Kaplan; Loretta J. Mester; and Randal K. Quarles. Ms. Daly voted as an alternate member at this meeting.

Everyone was in agreement this time around.

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