FOMC HIGHLIGHTS: Taper accelerated to USD 30bln/month (prev. USD 15bln); sees three rate hikes by end 2022 (prev. one)
Important
SourceNewsquawk
SectionFed
Full statement can be accessed here; updated economic projections can be accessed here.
QE TAPERING:
- TAPER PACE: USD 30bln (prev. USD 10bln Tsys, USD 5bln MBS)
- TAPER END: March 2022 (prev. June 2022), could adjust pace if warranted.
- TAPER GUIDANCE unchanged "prepared to adjust the pace of purchases if warranted by changes in the economic outlook")
RATE FORECASTS:
- 2022 DOT: three hikes to 0.9% (prev. saw one 2022 rate hike to 0.3%)
- END 2023 DOT: six hikes to 1.6% (prev. three-four at 1.00%)
- END 2024 DOT: eight hikes to 2.1% (prev. seven 25bps hikes to 1.8%)
- TERMINAL RATE FORECAST: 2.5% unchanged (prev. longer-run forecast of 2.5%)
- RATE GUIDANCE: Unchanged "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"
INFLATION:
- END-2022 PCE FORECAST: 2.6% (prev. 2.2%)
- END-2022 CORE PCE FORECAST: 2.7% (prev. 2.3%)
- END-2023, 2024 PCE FORECAST: 2.3%, 2.1% (prev. 2.2%, 2.1%)
- END-2023, 2024 CORE PCE FORECAST: 2.3%, 2.1% (prev. 2.2%, 2.1%)
- LONGER RUN PCE FORECAST: 2.0% (prev. 2.0%)
- STATEMENT: "elevated levels of inflation." (prev. "Inflation is elevated, largely reflecting factors that are expected to be transitory")