I wrote the title before the release and don’t know what the January FOMC statement will say. My guess? No policy change (hold today, hike anticipated in March) with maybe a couple sweet nothings inserted or previous phrases altered just a teeny to whisper a little sweet nothing in the market’s ear about how if inflation expectations were to drop too rapidly (they have been declining since November, after all), blah blah blah… But if the choice were between ‘still hawkish’ or a dovish flip, I’d go with ‘still hawkish’. I just don’t think expectations have dropped nearly hard enough yet to back them off.
Now let’s see what it actually says (drum roll to anti-climax, please…) T-minus 3 min…
Man, they are slamming the Fed’s server… Okay here it is.
January 26, 2022
Federal Reserve issues FOMC statement
For release at 2:00 p.m. EST
The path of the economy continues to depend on the course of the virus. Progress on vaccinations and an easing of supply constraints are expected to support continued gains in economic activity and employment as well as a reduction in inflation. Risks to the economic outlook remain, including from new variants of the virus.
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent. With inflation well above 2 percent and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate. The Committee decided to continue to reduce the monthly pace of its net asset purchases, bringing them to an end in early March. Beginning in February, the Committee will increase its holdings of Treasury securities by at least $20 billion per month and of agency mortgage‑backed securities by at least $10 billion per month. The Federal Reserve’s ongoing purchases and holdings of securities will continue to foster smooth market functioning and accommodative 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 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.
Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michelle W. Bowman; Lael Brainard; James Bullard; Esther L. George; Patrick Harker; Loretta J. Mester; and Christopher J. Waller. Patrick Harker voted as an alternate member at this meeting.