Fed chair Jerome Powell gives his opening remarks

The Federal Reserve on Wednesday kept its easy money policy in place despite an economy that it acknowledged is accelerating.

As expected, the U.S. central bank decided to keep short-term interest rates anchored near zero as it buys at least $120 billion of bonds each month. The latter part of policy is a two-pronged effort to support an economy that grew strongly to start 2021 as well as to support market functioning at a time when 30-year mortgages still go for around 3%.

Despite noting the economic strength as well as inflation that is on the rise, if just temporarily, the policymaking Federal Open Market Committee unanimously decided to make no changes in its approach and gave no indications that things will change anytime soon.

Fed Chairman Jerome Powell said the recovery is “uneven and far from complete.” While he noted that inflation pressures could rise in the coming months, these “one-time increases in prices are likely to only have transitory effects on inflation.”

Powell added that it’s still not time to talk about reducing policy accommodation, including the asset purchases.

“It will take some time before we see substantial further progress,” he said, repeating a phrase the FOMC has used repeatedly in its post-meeting statement.

Despite the dovish tone, stocks slid during Powell’s post-meeting news conference when he addressed the topic of financial stability. He noted that when some measure stability, “they look at some of the things that are going on in the equity markets, which I think do reflect froth.”

The post-meeting committee statement noted that efforts to combat the Covid-19 pandemic have helped boost the economy, though more needs to be done.

“Amid progress on vaccinations and strong policy support, indicators of economic activity and employment have strengthened,” the committee said.

“The sectors most adversely affected by the pandemic remain weak but have shown improvement,” it added. “Inflation has risen, largely reflecting transitory factors. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.”

The committee again noted that economic progress is largely dependent on the course of the pandemic. Daily case counts have dropped significantly as the U.S. has been vaccinating close to 3 million people a day.

“The ongoing public health crisis continues to weigh on the economy, and risks to the economic outlook remain,” the statement said. At the March meeting, the same sentence included “employment” as an area where the crisis was having a negative impact, indicating that officials are noting improvement in the labor market.

Committee members unanimously agreed to stay put on policy.

In the statement, “the Fed offered no hints that it was considering slowing the pace of its asset purchases, let alone thinking about raising interest rates,” said Paul Ashworth, chief U.S. economist at Capital Economics.

The decision comes the day before the Commerce Department releases preliminary first-quarter GDP figures that are projected to show a gain of 6.5%. Most economists, including those at the Fed, expect the U.S. to turn in its best full year since at least 1984.

Inflation also has been on the uptick, with March consumer prices rising 2.6% for the fastest year-over-year increase since August 2018.

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[bullishonbullion]

It's not the government's responsibility to support the economy.

[dustinjohnson]

Price stability havnt seen that yet. Assets price are crazy investing seem like a bad idea .

[kmh]

Papered-Fed Pow will do everything he can to keep the mother-of-all-bubbles from bursting.

[mrpmj]

For streaming stocks, BUY Amazon Prime, Disney +, Netflix.

Profitable companies are Amazon, Apple, Facebook, Nvidia, Microsoft, Netflix, Zoom so these are the stocks you want to own.
Also buy Wells Fargo, Disney for the recovery....;

[MrDonny]

Let forbearance expire god man. Y'all just print money out thin air.

[rp]

This guy is gonna destroy us on his alter to Blackrock.
Blackrock commands me to