The Fed Will Continue to Buy Assets Until Employment Completely Recovers
The Federal Reserve stated that it will continue to buy bonds until the job market recovers, according to Axios.
The Fed specifically stated that it would continue to buy AT LEAST $120 billion in bonds each month "until substantial further progress has been made toward the Committee’s maximum employment and price stability goals." Rates remain between 0 and .25 percent.
Fed Chairman Jerome Powell reiterated several times during the press conference that the central bank did not feel like the economy was in a good enough state to stop buying bonds. However, Powell did state that the evaluation of the economy had improved.
He also stated that stocks are not necessarily overvalued due to rates being so low. These statements were good for investors since it will continue to drive money into riskier assets such as equities. "These asset purchases help foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses," the Federal Open Market Committee said.
"We’re thinking this could be another long expansion and what we’re saying is we’re going to keep policy highly accommodative until inflation is well down the tracks."
"The key to Fed policy is not what they do from meeting to meeting, but how the public and markets perceive they will act over time," Lou Brien, rates strategist at DRW Trading, said in a note to clients.