Statement Tracker Changes
Inflation Goal and Key Changes
That’s quite a bit of changes as noted by the WSJ Statement Tracker.
You can read the full unedited Fed Announcement on its FOMC site.
The Fed wanted to exceed 2% inflation “for some time” and as everyone knows, exceeded expectations wildly. Of course, there is no mention of that.
In response, the Fed will reduce its net asset purchases by $20 billion a month for US treasuries and $10 billion for agency-mortgage-backed securities.
That’s It?!
Yes, that’s it. The despite inflation that even the Fed can see has overshot its goals (and bubbles that anyone with a modicum of common sense can see), the Fed will still add to its balance sheet.
The Fed will increase its holdings of Treasuries by $40 billion a month in January (down from $60 billion), and Agencies by $20 billion a month (down from $30 billion).
A Former Fed Governor Blasts Jerome Powell, Says Inflation is the Fed’s Choice
In case you missed it, please see A Former Fed Governor Blasts Jerome Powell, Says Inflation is the Fed’s Choice
“Inflation is a choice for which the Fed is chiefly responsible,” says Kevin Warsh.
Indeed, and judging from today’s modest tapering announcement, the Fed is still OK with more inflation.
Alternatively, it does not want to pop the bubbles it blew in the stock market. Either way, the Fed’s actions are pathetic.
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