The Fed kept interest rates unchanged between 0 and 0.25 percent at its meeting today. Following this decision, which global markets are eagerly waiting for, Fed Chairman Jerome Powell will answer questions at 22.30. The Fed, which did not increase interest rates last year, is expected to increase interest rates 4 times this year. Fed Chairman Jerome Powell stated that it is impossible to predict the interest rate path, and that the Omicron variant will have negative effects in the first quarter.
The first US Federal Reserve (FED) interest rate meeting of the new year took place. As a result of the meeting, which the global markets were eagerly waiting for, the Fed decided to keep the interest rates constant in the range of 0-0.25 percent. The Fed, which did not change interest rates at its meetings last year, is expected to increase interest rates more than once this year.
RESULTS UNANIMOUSLY
The decision on the interest rate in the FOMC was taken unanimously. According to the statement, it is planned to increase the interest rate target in the near future. The bond purchase program will be terminated in March.
At the 2-day meeting of the Federal Open Market Committee, which ended today, it was decided to end asset purchases in early March. With this decision, the Fed signaled that it would start interest rate hikes with the FOMC meeting to be held on March 16.
In the statement made after the FOMC meeting, he also emphasized that the reduction of the Fed balance sheet will begin after the rate hike.
"In the face of an inflation rate of well above 2 percent and a strong job market, the Committee expects it to be appropriate soon to increase the target range for the federal funds rate," the FOMC statement said.
In the statement, it was also stated that the FOMC members agreed on the principles to "severely reduce" the Fed's balance sheet, and it was stated that the size of the balance sheet would be determined by limiting how much of the principal payments from maturing bonds could be reinvested. Expressing that the balance sheet reduction will begin after the interest rates are increased, the Fed did not give a specific date.