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Analysts at Westpac offer their take on Wednesday’s FOMC monetary policy decision, as the American central bank maintained the status-quo at its first meeting of 2021.

Key quotes

“The US Federal Reserve’s FOMC left its policy settings unchanged as was widely expected: a 0%-0.25% Fed funds rate range, and at least $120 bn/month bond purchases.“

“The statement reiterated that QE will be maintained until “substantial further progress has been made toward the Committee’s maximum employment and price stability goals.”

“The pace of the recovery in the economy and employment was seen to have “moderated…with weakness concentrated in the sectors most adversely affected by the pandemic.” Looking ahead, the Fed said the path of the economy will depend on the course of the virus, adding “including progress on vaccines.”

“The ongoing public health crisis is seen to pose “considerable risks to the economic outlook.” The vote was a unanimous 11-0, with new governor Christopher Waller participating, along with the four regional Fed presidents rotated back to voting: Barkin, Bostic, Evans, and Daly.”