Fomc Minutes 20220126

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Page 1
Minutes of the Federal Open Market Committee

January 25–26, 2022
A joint meeting of the Federal Open Market Committee Patricia Zobel, Deputy Manager, System Open Market
and the Board of Governors of the Federal Reserve Sys- Account
tem was held by videoconference on Tuesday, Janu-
ary 25, 2022, at 9:00 a.m. and continued on Wednesday, Ann E. Misback, Secretary, Office of the Secretary,
January 26, 2022, at 9:00 a.m. 1 Board
Attendance
Matthew J. Eichner, 2 Director, Division of Reserve
Jerome H. Powell, Chair
Bank Operations and Payment Systems, Board;
John C. Williams, Vice Chair
Michael S. Gibson, Director, Division of
Michelle W. Bowman
Supervision and Regulation, Board
Lael Brainard
James Bullard
Daniel M. Covitz, Deputy Director, Division of
Esther L. George
Research and Statistics, Board; Sally Davies,
Loretta J. Mester
Deputy Director, Division of International
Christopher J. Waller
Finance, Board; Rochelle M. Edge, Deputy
Director, Division of Monetary Affairs, Board;
Meredith Black, Charles L. Evans, Patrick Harker,
Michael T. Kiley, Deputy Director, Division of
Naureen Hassan, and Neel Kashkari, Alternate
Financial Stability, Board
Members of the Committee
Jon Faust and Joshua Gallin, Senior Special Advisers to
Thomas I. Barkin, Raphael W. Bostic, and Mary C.
the Chair, Division of Board Members, Board
Daly, Presidents of the Federal Reserve Banks of
Richmond, Atlanta, and San Francisco, respectively
Antulio N. Bomfim, Jane E. Ihrig, Kurt F. Lewis, and
Nitish R. Sinha, Special Advisers to the Board,
Kenneth C. Montgomery, Interim President of the
Division of Board Members, Board
Federal Reserve Bank of Boston
Linda Robertson, Assistant to the Board, Division of
James A. Clouse, Secretary
Board Members, Board
Matthew M. Luecke, Deputy Secretary
Brian J. Bonis, Assistant Secretary
Michael G. Palumbo, Senior Associate Director,
Michelle A. Smith, Assistant Secretary
Division of Research and Statistics, Board
Mark E. Van Der Weide, General Counsel
Michael Held, Deputy General Counsel
Stephanie E. Curcuru,2 Associate Director, Division of
Trevor A. Reeve, Economist
International Finance, Board; Eric C. Engstrom
Stacey Tevlin, Economist
and Christopher J. Gust, Associate Directors,
Beth Anne Wilson, Economist
Division of Monetary Affairs, Board; Glenn
Follette, Associate Director, Division of Research
Shaghil Ahmed, Brian M. Doyle, Carlos Garriga,
and Statistics, Board
Joseph W. Gruber, David E. Lebow, Ellis W.
Tallman, Geoffrey Tootell, and William Wascher,
Erik A. Heitfield, Deputy Associate Director, Division
Associate Economists
of Research and Statistics, Board; Laura Lipscomb
and Zeynep Senyuz,2 Deputy Associate Directors,
Lorie K. Logan, Manager, System Open Market
Division of Monetary Affairs, Board
Account
1 The Federal Open Market Committee is referenced as the 2 Attended through the discussion of principles for reducing
“FOMC” and the “Committee” in these minutes; the Board the size of the balance sheet.
of Governors of the Federal Reserve System is referenced as
the “Board” in these minutes.
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Page 2 Federal Open Market Committee
Etienne Gagnon2 and Andrew Meldrum, Assistant Deborah Leonard2 and Rania Perry,2 Vice Presidents,
Directors, Division of Monetary Affairs, Board Federal Reserve Bank of New York
Mark A. Carlson, Adviser, Division of Monetary James Dolmas, Economic Policy Adviser and Senior
Affairs, Board Economist, Federal Reserve Bank of Dallas
Alyssa G. Anderson and Valerie S. Hinojosa, Section Radhika Mithal,2 Markets Officer, Federal Reserve
Chiefs, Division of Monetary Affairs, Board; Bank of New York
Penelope A. Beattie, 3 Section Chief, Office of the
Secretary, Board Annual Organizational Matters 4
The agenda for this meeting reported that advices of the
Alyssa Arute, Manager, Division of Reserve Bank election of the following members and alternate mem-
Operations and Payment Systems, Board bers of the Federal Open Market Committee for a term
beginning January 25, 2022, were received and that these
Camille Bryan, Senior Project Manager, Division of individuals executed their oaths of office.
Monetary Affairs, Board
The elected members and alternate members were as fol-
lows:
David H. Small, Project Manager, Division of
Monetary Affairs, Board John C. Williams, President of the Federal Reserve Bank
of New York, with Naureen Hassan, First Vice President
Damjan Pfajfar, Mary Tian, and Randall A. Williams, of the Federal Reserve Bank of New York, as alternate
Group Managers, Division of Monetary Affairs,
Patrick Harker, President of the Federal Reserve Bank
Board
of Philadelphia, as alternate
David B. Cashin, Principal Economist, Division of Loretta J. Mester, President of the Federal Reserve Bank
Research and Statistics, Board; Erin E. Ferris, of Cleveland, with Charles L. Evans, President of the
Kyungmin Kim, and Bernd Schlusche,2 Principal Federal Reserve Bank of Chicago, as alternate
Economists, Division of Monetary Affairs, Board; James Bullard, President of the Federal Reserve Bank of
Colin J. Hottman, Principal Economist, Division St. Louis, with Meredith Black, Interim President of the
of International Finance, Board Federal Reserve Bank of Dallas, as alternate
David Na,2 Senior Financial Institution and Policy Esther L. George, President of the Federal Reserve Bank
Analyst, Division of Monetary Affairs, Board of Kansas City, with Neel Kashkari, President of the
Federal Reserve Bank of Minneapolis, as alternate.
Isaiah C. Ahn, Information Management Analyst, By unanimous vote, the following officers of the Com-
Division of Monetary Affairs, Board mittee were selected to serve until the selection of their
successors at the first regularly scheduled meeting of the
David Altig, Kartik B. Athreya, and Sylvain Leduc, Committee in 2023:
Executive Vice Presidents, Federal Reserve Banks
of Atlanta, Richmond, and San Francisco, Jerome H. Powell Chair
respectively John C. Williams Vice Chair
James A. Clouse Secretary
Anne Baum, John Clark,2 Spencer Krane, Paolo A. Matthew M. Luecke Deputy Secretary
Pesenti, Julie Ann Remache,2 Keith Sill, and Mark Brian J. Bonis Assistant Secretary
L.J. Wright, Senior Vice Presidents, Federal Michelle A. Smith Assistant Secretary
Reserve Banks of New York, New York, Chicago, Mark E. Van Der Weide General Counsel
New York, New York, Philadelphia, and Michael Held Deputy General Counsel
Minneapolis, respectively Richard M. Ashton Assistant General Counsel
3 Attended Tuesday’s session only. 4 Committee organizational documents are available at

www.federalreserve.gov/monetarypolicy/rules_authoriza-
tions.htm.
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Minutes of the Meeting of January 25–26, 2022 Page 3
Trevor Reeve Economist A. To buy or sell in the open market securities that
Stacey Tevlin Economist are direct obligations of, or fully guaranteed as to prin-
Beth Anne Wilson Economist cipal and interest by, the United States, and securities
that are direct obligations of, or fully guaranteed as to
Shaghil Ahmed principal and interest by, any agency of the United
Brian M. Doyle States, that are eligible for purchase or sale under Sec-
Carlos Garriga tion 14(b) of the Federal Reserve Act (“Eligible Secu-
Joseph W. Gruber rities”) for the System Open Market Account
Beverly Hirtle (“SOMA”):
David E. Lebow i. As an outright operation with securities dealers
Ellis W. Tallman and foreign and international accounts maintained
Geoffrey Tootell at the Selected Bank: on a same-day or deferred de-
William Wascher Associate Economists livery basis (including such transactions as are com-
monly referred to as dollar rolls and coupon swaps)
By unanimous vote, the Committee selected the Federal
at market prices; or
Reserve Bank of New York to execute transactions for
ii. As a temporary operation: on a same-day or
the System Open Market Account (SOMA).
deferred delivery basis, to purchase such Eligible Se-
By unanimous vote, the Committee selected Lorie K. curities subject to an agreement to resell (“repo
Logan and Patricia Zobel to serve at the pleasure of the transactions”) or to sell such Eligible Securities sub-
Committee as manager and deputy manager of the ject to an agreement to repurchase (“reverse repo
SOMA, respectively, on the understanding that these se- transactions”) for a term of 65 business days or less,
lections were subject to being satisfactory to the Federal at rates that, unless otherwise authorized by the
Reserve Bank of New York. Committee, are determined by competitive bidding,
after applying reasonable limitations on the volume
Secretary’s note: The Federal Reserve Bank of
of agreements with individual counterparties;
New York subsequently sent advice that the
B. To allow Eligible Securities in the SOMA to ma-
manager and deputy manager selections indi-
ture without replacement;
cated previously were satisfactory.
C. To exchange, at market prices, in connection
By unanimous vote, the Committee voted to reaffirm with a Treasury auction, maturing Eligible Securities in
without revision the Authorization for Domestic Open the SOMA with the Treasury, in the case of Eligible
Market Operations, as shown below. By unanimous Securities that are direct obligations of the United
vote, the Committee voted to reaffirm without revision States or that are fully guaranteed as to principal and
the Authorization for Foreign Currency Operations and interest by the United States; and
to amend the Foreign Currency Directive to remove ref- D. To exchange, at market prices, maturing Eligible
erences to the temporary dollar liquidity swap arrange- Securities in the SOMA with an agency of the United
ments with foreign central banks, as shown below. The States, in the case of Eligible Securities that are direct
Guidelines for the Conduct of System Open Market Op- obligations of that agency or that are fully guaranteed
erations in Federal-Agency Issues remained suspended. as to principal and interest by that agency.
AUTHORIZATION FOR DOMESTIC OPEN
MARKET OPERATIONS SECURITIES LENDING
(As reaffirmed effective January 25, 2022)
2. In order to ensure the effective conduct of open
OPEN MARKET TRANSACTIONS market operations, the Committee authorizes the Se-
lected Bank to operate a program to lend Eligible Secu-
1. The Federal Open Market Committee (the “Com- rities held in the SOMA to dealers on an overnight basis
mittee”) authorizes and directs the Federal Reserve Bank (except that the Selected Bank may lend Eligible Securi-
selected by the Committee to execute open market trans- ties for longer than an overnight term to accommodate
actions (the “Selected Bank”), to the extent necessary to weekend, holiday, and similar trading conventions).
carry out the most recent domestic policy directive A. Such securities lending must be:
adopted by the Committee: i. At rates determined by competitive bidding;
ii. At a minimum lending fee consistent with the
objectives of the program;
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iii. Subject to reasonable limitations on the total ii. Undertake repo transactions in Eligible Securi-
amount of a specific issue of Eligible Securities that ties with Foreign Accounts; and
may be auctioned; and B. Any Federal Reserve Bank that maintains Cus-
iv. Subject to reasonable limitations on the tomer Accounts, for any such Customer Account,
amount of Eligible Securities that each borrower when appropriate and subject to all other necessary
may borrow. authorization and approvals, to:
B. The Selected Bank may: i. Undertake repo transactions in Eligible Securi-
i. Reject bids that, as determined in its sole dis- ties with dealers with a corresponding reverse repo
cretion, could facilitate a bidder’s ability to control a transaction in such Eligible Securities with the Cus-
single issue; tomer Accounts; and
ii. Accept Treasury securities or cash as collateral ii. Undertake intra-day repo transactions in Eligi-
for any loan of securities authorized in this para- ble Securities with Foreign Accounts.
graph 2; and Transactions undertaken with Customer Accounts un-
iii. Accept agency securities as collateral only for a der the provisions of this paragraph 4 may provide for a
loan of agency securities authorized in this para- service fee when appropriate. Transactions undertaken
graph 2. with Customer Accounts are also subject to the authori-
zation or approval of other entities, including the Board
OPERATIONAL READINESS TESTING of Governors of the Federal Reserve System and, when
involving accounts maintained at a Federal Reserve
3. The Committee authorizes the Selected Bank to Bank as fiscal agent of the United States, the United
undertake transactions of the type described in para- States Department of the Treasury.
graphs 1 and 2 from time to time for the purpose of test-
ing operational readiness, subject to the following limi- ADDITIONAL MATTERS
tations:
A. All transactions authorized in this paragraph 3 5. The Committee authorizes the Chair of the Com-
shall be conducted with prior notice to the Commit- mittee, in fostering the Committee’s objectives during
tee; any period between meetings of the Committee, to in-
B. The aggregate par value of the transactions au- struct the Selected Bank to act on behalf of the Commit-
thorized in this paragraph 3 that are of the type de- tee to:
scribed in paragraph 1.A.i, 1.B, 1.C and 1.D shall not A. Adjust somewhat in exceptional circumstances
exceed $5 billion per calendar year; and the stance of monetary policy and to take actions that
C. The outstanding amount of the transactions de- may result in material changes in the composition and
scribed in paragraphs 1.A.ii and 2 shall not exceed size of the assets in the SOMA; or
$5 billion at any given time. B. Undertake transactions with respect to Eligible
Securities in order to appropriately address temporary
TRANSACTIONS WITH CUSTOMER ACCOUNTS disruptions of an operational or highly unusual nature
in U.S. dollar funding markets.
4. In order to ensure the effective conduct of open Any such adjustment described in subparagraph A of
market operations, while assisting in the provision of this paragraph 5 shall be made in the context of the
short-term investments or other authorized services for Committee’s discussion and decision about the stance of
foreign central bank and international accounts main- policy at its most recent meeting and the Committee’s
tained at a Federal Reserve Bank (the “Foreign Ac- long-run objectives to foster maximum employment and
counts”) and accounts maintained at a Federal Reserve price stability, and shall be based on economic, financial,
Bank as fiscal agent of the United States pursuant to sec- and monetary developments since the most recent meet-
tion 15 of the Federal Reserve Act (together with the ing of the Committee. The Chair, whenever feasible, will
Foreign Accounts, the “Customer Accounts”), the Com- consult with the Committee before making any instruc-
mittee authorizes the following when undertaken on tion under this paragraph 5.
terms comparable to those available in the open market:
A. The Selected Bank, for the SOMA, to:
i. Undertake reverse repo transactions in Eligible
Securities held in the SOMA with the Customer Ac-
counts for a term of 65 business days or less; and
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AUTHORIZATION FOR FOREIGN CURRENCY STANDALONE SPOT AND FORWARD TRANS-

OPERATIONS ACTIONS
(As reaffirmed effective January 25, 2022)
3. For any operation that involves standalone spot or
IN GENERAL
forward transactions in foreign currencies:
A. Approval of such operation is required as fol-
1. The Federal Open Market Committee (the “Com-
lows:
mittee”) authorizes the Federal Reserve Bank selected by
i. The Committee must direct the Selected Bank
the Committee (the “Selected Bank”) to execute open
in advance to execute the operation if it would result
market transactions for the System Open Market Ac-
in the overall volume of standalone spot and for-
count as provided in this Authorization, to the extent
ward transactions in foreign currencies, as defined
necessary to carry out any foreign currency directive of
in paragraph 3.C of this Authorization, exceeding
the Committee:
$5 billion since the close of the most recent regular
A. To purchase and sell foreign currencies (also
meeting of the Committee. The Foreign Currency
known as cable transfers) at home and abroad in the
Subcommittee (the “Subcommittee”) must direct
open market, including with the United States Treas-
the Selected Bank in advance to execute the opera-
ury, with foreign monetary authorities, with the Bank
tion if the Subcommittee believes that consultation
for International Settlements, and with other entities
with the Committee is not feasible in the time avail-
in the open market. This authorization to purchase
able.
and sell foreign currencies encompasses purchases and
ii. The Committee authorizes the Subcommittee
sales through standalone spot or forward transactions
to direct the Selected Bank in advance to execute the
and through foreign exchange swap transactions. For
operation if it would result in the overall volume of
purposes of this Authorization, foreign exchange
standalone spot and forward transactions in foreign
swap transactions are: swap transactions with the
currencies, as defined in paragraph 3.C of this Au-
United States Treasury (also known as warehousing
thorization, totaling $5 billion or less since the close
transactions), swap transactions with other central
of the most recent regular meeting of the Commit-
banks under reciprocal currency arrangements, swap
tee.
transactions with other central banks understanding
B. Such an operation also shall be:
dollar liquidity and foreign currency liquidity swap ar-
i. Generally directed at countering disorderly
rangements, and swap transactions with other entities
market conditions; or
in the open market.
ii. Undertaken to adjust System balances in light
B. To hold balances of, and to have outstanding for-
of probable future needs for currencies; or
ward contracts to receive or to deliver, foreign curren-
iii. Conducted for such other purposes as may be
cies.
determined by the Committee.
2. All transactions in foreign currencies undertaken
C. For purposes of this Authorization, the overall
pursuant to paragraph 1 above shall, unless otherwise
volume of standalone spot and forward transactions
authorized by the Committee, be conducted:
in foreign currencies is defined as the sum (disregard-
A. In a manner consistent with the obligations re-
ing signs) of the dollar values of individual foreign cur-
garding exchange arrangements under Article IV of
rencies purchased and sold, valued at the time of the
the Articles of Agreement of the International Mone-
transaction.
tary Fund (IMF).1
B. In close and continuous cooperation and consul-
WAREHOUSING
tation, as appropriate, with the United States Treasury.
C. In consultation, as appropriate, with foreign
4. The Committee authorizes the Selected Bank, with
monetary authorities, foreign central banks, and inter-
the prior approval of the Subcommittee and at the re-
national monetary institutions.
quest of the United States Treasury, to conduct swap
D. At prevailing market rates.
transactions with the United States Exchange Stabiliza-
tion Fund established by section 10 of the Gold Reserve
Act of 1934 under agreements in which the Selected
Bank purchases foreign currencies from the Exchange
Stabilization Fund and the Exchange Stabilization Fund
repurchases the foreign currencies from the Selected
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Bank at a later date (such purchases and sales also known any changes in terms, and the terms shall be con-
as warehousing). sistent with principles discussed with and guidance
provided by the Committee.
RECIPROCAL CURRENCY ARRANGEMENTS,
AND STANDING DOLLAR AND FOREIGN CUR- OTHER OPERATIONS IN FOREIGN CURREN-
RENCY LIQUIDITY SWAPS CIES
5. The Committee authorizes the Selected Bank to 6. Any other operations in foreign currencies for
maintain reciprocal currency arrangements established which governance is not otherwise specified in this Au-
under the North American Framework Agreement, thorization (such as foreign exchange swap transactions
standing dollar liquidity swap arrangements, temporary with private-sector counterparties) must be authorized
dollar liquidity swap arrangements, and standing foreign and directed in advance by the Committee.
currency liquidity swap arrangements as provided in this
Authorization and to the extent necessary to carry out FOREIGN CURRENCY HOLDINGS
any foreign currency directive of the Committee.
A. For reciprocal currency arrangements all draw- 7. The Committee authorizes the Selected Bank to
ings must be approved in advance by the Committee hold foreign currencies for the System Open Market Ac-
(or by the Subcommittee, if the Subcommittee be- count in accounts maintained at foreign central banks,
lieves that consultation with the Committee is not fea- the Bank for International Settlements, and such other
sible in the time available). foreign institutions as approved by the Board of Gover-
B. For standing and temporary dollar liquidity swap nors under Section 214.5 of Regulation N, to the extent
arrangements all drawings must be approved in ad- necessary to carry out any foreign currency directive of
vance by the Chair. The Chair may approve a schedule the Committee.
of potential drawings, and may delegate to the man- A. The Selected Bank shall manage all holdings of
ager, System Open Market Account, the authority to foreign currencies for the System Open Market Ac-
approve individual drawings that occur according to count:
the schedule approved by the Chair. i. Primarily, to ensure sufficient liquidity to ena-
C. For standing foreign currency liquidity swap ar- ble the Selected Bank to conduct foreign currency
rangements all drawings must be approved in advance operations as directed by the Committee;
by the Committee (or by the Subcommittee, if the ii. Secondarily, to maintain a high degree of
Subcommittee believes that consultation with the safety;
Committee is not feasible in the time available). iii. Subject to paragraphs 7.A.i and 7.A.ii, to pro-
D. Operations involving standing and temporary vide the highest rate of return possible in each cur-
dollar liquidity swap arrangements and standing for- rency; and
eign currency liquidity swap arrangements shall gener- iv. To achieve such other objectives as may be au-
ally be directed at countering strains in financial mar- thorized by the Committee.
kets in the United States or abroad, or reducing the B. The Selected Bank may manage such foreign cur-
risk that they could emerge, so as to mitigate their ef- rency holdings by:
fects on economic and financial conditions in the i. Purchasing and selling obligations of, or fully
United States. guaranteed as to principal and interest by, a foreign
E. For reciprocal currency arrangements, standing government or agency thereof (“Permitted Foreign
and temporary dollar liquidity swap arrangements, and Securities”) through outright purchases and sales;
standing foreign currency liquidity swap arrangements: ii. Purchasing Permitted Foreign Securities under
i. All arrangements are subject to annual review agreements for repurchase of such Permitted For-
and approval by the Committee; eign Securities and selling such securities under
ii. Any new arrangements must be approved by agreements for the resale of such securities; and
the Committee; and iii. Managing balances in various time and other
iii. Any changes in the terms of existing arrange- deposit accounts at foreign institutions approved by
ments must be approved in advance by the Chair. the Board of Governors under Regulation N.
The Chair shall keep the Committee informed of C. The Subcommittee, in consultation with the
Committee, may provide additional instructions to the
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Selected Bank regarding holdings of foreign curren- Chair, whenever feasible, will consult with the Commit-
cies. tee before making any instruction under this paragraph.
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ADDITIONAL MATTERS 1 In general, as specified in Article IV, each member of the
IMF undertakes to collaborate with the IMF and other
8. The Committee authorizes the Chair: members to assure orderly exchange arrangements and to
A. With the prior approval of the Committee, to en- promote a stable system of exchange rates. These obligations
include seeking to direct the member’s economic and financial
ter into any needed agreement or understanding with
policies toward the objective of fostering orderly economic
the Secretary of the United States Treasury about the growth with reasonable price stability. These obligations also
division of responsibility for foreign currency opera- include avoiding manipulating exchange rates or the
tions between the System and the United States Treas- international monetary system in such a way that would
ury; impede effective balance of payments adjustment or to give
B. To advise the Secretary of the United States an unfair competitive advantage over other members.
Treasury concerning System foreign currency opera-
tions, and to consult with the Secretary on policy mat- FOREIGN CURRENCY DIRECTIVE
ters relating to foreign currency operations; (As amended effective January 25, 2022)
C. To designate Federal Reserve System persons au-
1. The Committee directs the Federal Reserve Bank
thorized to communicate with the United States
selected by the Committee (the “Selected Bank”) to ex-
Treasury concerning System Open Market Account
ecute open market transactions, for the System Open
foreign currency operations; and
Market Account, in accordance with the provisions of
D. From time to time, to transmit appropriate re-
the Authorization for Foreign Currency Operations (the
ports and information to the National Advisory Coun-
“Authorization”) and subject to the limits in this Di-
cil on International Monetary and Financial Policies.
rective.
9. The Committee authorizes the Selected Bank to
2. The Committee directs the Selected Bank to exe-
undertake transactions of the type described in this Au-
cute warehousing transactions, if so requested by the
thorization, and foreign exchange and investment
United States Treasury and if approved by the Foreign
transactions that it may be otherwise authorized to
Currency Subcommittee (the “Subcommittee”), subject
undertake, from time to time for the purpose of testing
to the limitation that the outstanding balance of United
operational readiness. The aggregate amount of such
States dollars provided to the United States Treasury as
transactions shall not exceed $2.5 billion per calendar
a result of these transactions not at any time exceed
year. These transactions shall be conducted with prior
$5 billion.
notice to the Committee.
3. The Committee directs the Selected Bank to main-
10. All Federal Reserve banks shall participate in the
tain, for the System Open Market Account:
foreign currency operations for System Open Market
A. Reciprocal currency arrangements with the fol-
Account in accordance with paragraph 3G(1) of the
lowing foreign central banks:
Board of Governors’ Statement of Procedure with Re-
spect to Foreign Relationships of Federal Reserve Banks
Foreign central bank Maximum amount
dated January 1, 1944.
(millions of dollars
11. Any authority of the Subcommittee pursuant to
or equivalent)
this Authorization may be exercised by the Chair if the
Bank of Canada 2,000
Chair believes that consultation with the Subcommittee
Bank of Mexico 3,000
is not feasible in the time available. The Chair shall
promptly report to the Subcommittee any action ap-
B. Standing dollar liquidity swap arrangements with
proved by the Chair pursuant to this paragraph.
the following foreign central banks:
12. The Committee authorizes the Chair, in excep-
tional circumstances where it would not be feasible to
Bank of Canada
convene the Committee, to foster the Committee’s ob-
Bank of England
jectives by instructing the Selected Bank to engage in
Bank of Japan
foreign currency operations not otherwise authorized
European Central Bank
pursuant to this Authorization. Any such action shall be
Swiss National Bank
made in the context of the Committee’s discussion and
decisions regarding foreign currency operations. The
_____________________________________________________________________________________________
C. Standing foreign currency liquidity swap arrange- (iii) be conducted with a minimum bid rate set at a level
ments with the following foreign central banks: directed by the Committee; (iv) be offered on an over-
night basis (except that the Open Market Desk at the
Bank of Canada Selected Bank may extend the term for longer than an
Bank of England overnight term to accommodate weekend, holiday, and
Bank of Japan similar trading conventions); and (v) be subject to an ag-
European Central Bank gregate operation limit of $500 billion. The aggregate
Swiss National Bank operation limit can be temporarily increased at the dis-
cretion of the Chair. These operations shall be con-
4. The Committee directs the Selected Bank to hold ducted by the Open Market Desk at the Selected Bank
and to invest foreign currencies in the portfolio in ac- until otherwise directed by the Committee.
cordance with the provisions of paragraph 7 of the Au-
STANDING FIMA REPURCHASE AGREEMENT
thorization.
RESOLUTION
5. The Committee directs the Selected Bank to report
(As amended effective January 25, 2022)
to the Committee, at each regular meeting of the Com-
mittee, on transactions undertaken pursuant to para- The Federal Open Market Committee (the “Commit-
graphs 1 and 6 of the Authorization. The Selected Bank tee”) authorizes and directs the Open Market Desk at
is also directed to provide quarterly reports to the Com- the Federal Reserve Bank of New York (the “Selected
mittee regarding the management of the foreign cur- Bank”), for the System Open Market Account
rency holdings pursuant to paragraph 7 of the Authori- (“SOMA”), to offer to purchase U.S. Treasury securities
zation. subject to an agreement to resell (“repurchase agreement
6. The Committee directs the Selected Bank to con- transactions”) with foreign central bank and interna-
duct testing of transactions for the purpose of operational accounts maintained at a Federal Reserve Bank
tional readiness in accordance with the provisions of (the “Foreign Accounts”). The repurchase agreement
paragraph 9 of the Authorization. transactions hereby authorized and directed shall (i) in-
The Committee voted unanimously to approve with clude only U.S. Treasury securities; (ii) be conducted
minor revisions the Standing Repurchase Agreement Fa- with Foreign Accounts approved in advance by the For-
cility Resolution, as shown below. All but one member eign Currency Subcommittee (the ”Subcommittee”); (iii)
of the Committee voted to approve with minor revisions be conducted at an offering rate equal to the minimum
the Standing FIMA Repurchase Agreement Resolution. bid rate for the standing repurchase agreement facility
Governor Bowman abstained from the vote on the unless the Subcommittee establishes a different offering
Standing FIMA Repurchase Agreement Resolution. rate; (iv) be offered on an overnight basis (except that
The resolutions were modified to remove references to the Open Market Desk at the Selected Bank may extend
a specific facility rate to allow for normal adjustment in the term for longer than an overnight term to accommo-
the facility rates when the Committee makes changes to date weekend, holiday, and similar trading conventions);
the target range for the federal funds rate. and (v) be subject to a per-counterparty limit of $60 bil-
lion per day. The Subcommittee may approve changes
STANDING REPURCHASE AGREEMENT FACIL-
in the offering rate, the maturity of the transactions, eli-
ITY RESOLUTION
gible Foreign Accounts counterparties (either by ap-
(As amended effective January 25, 2022)
proving or removing account access), and the counter-
The Federal Open Market Committee (the “Commit- party limit; and the Subcommittee shall keep the Com-
tee”) authorizes and directs the Open Market Desk at mittee informed of any such changes. These transac-
the Federal Reserve Bank of New York (the “Selected tions shall be undertaken by the Open Market Desk at
Bank”), for the System Open Market Account the Selected Bank until otherwise directed by the Com-
(“SOMA”), to conduct operations in which it offers to mittee. The Open Market Desk at the Selected Bank will
purchase securities, subject to an agreement to resell also report at least annually to the Committee on facility
(“repurchase agreement transactions”). The repurchase usage and the list of approved account holders.
agreement transactions hereby authorized and directed
Regarding the tough and comprehensive ethics rules for
shall (i) include only U.S. Treasury securities, agency
senior officials that were announced in October, the
debt securities, and agency mortgage-backed securities;
Chair indicated that staff were working through com-
(ii) be conducted as open market operations with pri-
ments received from policymakers and were aiming to
mary dealers and depository institutions as participants;
_____________________________________________________________________________________________
circulate a new draft soon. Noting the urgency in bring- that affect the structure and dynamics of the labor mar-
ing the new policy to completion, the Chair proposed ket. Consequently, it would not be appropriate to spec-
that the Committee vote on a final draft as soon in the ify a fixed goal for employment; rather, the Committee’s
intermeeting period as possible. policy decisions must be informed by assessments of the
shortfalls of employment from its maximum level, rec-
In the Committee’s annual reconsideration of the State-
ognizing that such assessments are necessarily uncertain
ment on Longer-Run Goals and Monetary Policy Strat-
and subject to revision. The Committee considers a
egy, all participants supported the statement as written,
wide range of indicators in making these assessments.
and the Committee voted unanimously to reaffirm with-
The inflation rate over the longer run is primarily de-
out revision.
termined by monetary policy, and hence the Committee
In discussing the statement, the Chair noted that, con- has the ability to specify a longer-run goal for inflation.
sistent with previous communications, a formal frame- The Committee reaffirms its judgment that inflation at
work review would commence in 2024 and conclude in the rate of 2 percent, as measured by the annual change
2025. That timing would allow perspectives on recent in the price index for personal consumption expendi-
events to inform considerations of potential revisions to tures, is most consistent over the longer run with the
the framework. Federal Reserve’s statutory mandate. The Committee
judges that longer-term inflation expectations that are
STATEMENT ON LONGER-RUN GOALS AND
well anchored at 2 percent foster price stability and mod-
MONETARY POLICY STRATEGY
(As reaffirmed effective January 25, 2022) erate long-term interest rates and enhance the Commit-
tee’s ability to promote maximum employment in the
The Federal Open Market Committee (FOMC) is face of significant economic disturbances. In order to
firmly committed to fulfilling its statutory mandate from anchor longer-term inflation expectations at this level,
the Congress of promoting maximum employment, sta- the Committee seeks to achieve inflation that averages
ble prices, and moderate long-term interest rates. The 2 percent over time, and therefore judges that, following
Committee seeks to explain its monetary policy deci- periods when inflation has been running persistently be-
sions to the public as clearly as possible. Such clarity low 2 percent, appropriate monetary policy will likely
facilitates well-informed decisionmaking by households aim to achieve inflation moderately above 2 percent for
and businesses, reduces economic and financial uncer- some time.
tainty, increases the effectiveness of monetary policy, Monetary policy actions tend to influence economic
and enhances transparency and accountability, which are activity, employment, and prices with a lag. In setting
essential in a democratic society. monetary policy, the Committee seeks over time to mit-
Employment, inflation, and long-term interest rates igate shortfalls of employment from the Committee’s as-
fluctuate over time in response to economic and finan- sessment of its maximum level and deviations of infla-
cial disturbances. Monetary policy plays an important tion from its longer-run goal. Moreover, sustainably
role in stabilizing the economy in response to these dis- achieving maximum employment and price stability de-
turbances. The Committee’s primary means of adjusting pends on a stable financial system. Therefore, the Com-
the stance of monetary policy is through changes in the mittee’s policy decisions reflect its longer-run goals, its
target range for the federal funds rate. The Committee medium-term outlook, and its assessments of the bal-
judges that the level of the federal funds rate consistent ance of risks, including risks to the financial system that
with maximum employment and price stability over the could impede the attainment of the Committee’s goals.
longer run has declined relative to its historical average. The Committee’s employment and inflation objectives
Therefore, the federal funds rate is likely to be con- are generally complementary. However, under circum-
strained by its effective lower bound more frequently stances in which the Committee judges that the objec-
than in the past. Owing in part to the proximity of in- tives are not complementary, it takes into account the
terest rates to the effective lower bound, the Committee employment shortfalls and inflation deviations and the
judges that downward risks to employment and inflation potentially different time horizons over which employ-
have increased. The Committee is prepared to use its ment and inflation are projected to return to levels
full range of tools to achieve its maximum employment judged consistent with its mandate.
and price stability goals. The Committee intends to review these principles and
The maximum level of employment is a broad-based to make adjustments as appropriate at its annual organi-
and inclusive goal that is not directly measurable and zational meeting each January, and to undertake roughly
changes over time owing largely to nonmonetary factors
_____________________________________________________________________________________________
every five years a thorough public review of its monetary with much of the increase following the release of the
policy strategy, tools, and communication practices. minutes for the December FOMC meeting. In addition,
agency mortgage-backed securities (MBS) spreads wid-
Financial Developments and Open Market ened notably after having been stable at low levels for
Operations the past year, reportedly driven by expectations for an
The manager turned first to a review of domestic finan- earlier and faster runoff of agency MBS than had been
cial market developments over the intermeeting period. expected.
Treasury yields rose across the curve, led by higher real
The manager turned next to a discussion of international
yields. Expectations for tighter monetary policy ahead,
financial market developments. Sovereign yields in-
as well as an easing of COVID-related concerns, were
creased across advanced foreign economies (AFEs), re-
cited as contributing to the increase in yields. The
portedly driven by receding concerns about the Omi-
S&P 500 index declined around 5 percent, with sharp
cron variant, elevated inflation readings, and, relatedly,
moves toward the end of the period, reportedly
expectations that central banks would remove policy ac-
prompted by concerns about the implications of a
commodation sooner than had been expected. Several
tighter path of monetary policy and rising geopolitical
central banks concluded their net asset purchases late
risks.
last year, and more were expected to do so this year. On
Regarding the monetary policy outlook, with data show- the outlook for policy rates, several central banks had
ing continuing tightening of labor market conditions and either already increased their policy rates or were ex-
elevated inflationary pressures, policymaker communi- pected to do so later this year.
cations were perceived as pointing to an earlier and
The manager provided an update on issues related to
faster removal of accommodation than market partici-
monetary policy implementation. Reductions in the
pants had previously expected. Against this backdrop,
pace of the Committee’s net asset purchases had pro-
respondents to the Open Market Desk’s surveys of pri-
ceeded smoothly to date and functioning in Treasury
mary dealers and market participants almost uniformly
and agency MBS markets remained stable. Regarding
projected that the Federal Reserve’s net asset purchases
the potential for the Committee to reduce System Open
would end by mid-March. The median survey projec-
Market Account (SOMA) holdings in the future, market
tion for the commencement of balance sheet runoff
participants generally anticipated that SOMA redemp-
shifted into the third quarter of this year, roughly a year
tions could proceed smoothly at a somewhat faster pace
and a half sooner than in the December surveys. Most
than during the previous period of balance sheet reduc-
survey respondents also expected the portfolio to de-
tion from 2017 to 2019. However, some also noted that
cline at a significantly faster pace than they did in De-
SOMA redemptions would require significant adjust-
cember.
ments to private-sector balance sheets, as investors ab-
Expectations for the path of the federal funds rate sorb the net increase in Treasury and agency MBS issu-
shifted toward earlier rate increases, and interest rate fu- ance to the private sector and money markets transition
tures priced in an increase in the target range for the fed- to lower levels of liquidity, and that these adjustments
eral funds rate at the March FOMC meeting. On aver- could take some time.
age, respondents to the Desk surveys assigned a roughly
The manager discussed expectations for the evolution of
70 percent probability to an increase in the target range
the Federal Reserve’s administered rates in connection
in March. The expected path of the federal funds rate in
with a potential future change in the target range for the
the Desk surveys and derived from interest rate futures
federal funds rate. The Desk survey responses suggested
also steepened over the period. The median survey pro-
expectations for administered rates to be raised by the
jection for the most likely level of the target range at the
same increment as the target range for the federal funds
end of 2024 was about 2 percent, similar to December.
rate. The manager noted that the current setting of ad-
Nonetheless, survey respondents attached significant
ministered rates relative to the target range had been
probability to outcomes in which the target range moved
working well and anticipated that it could continue to
up more than indicated by the projected modal path.
support effective policy implementation following any
Changing views about the likely path of the Federal Re- increase in the target range in coming months, although
serve’s balance sheet following the release of the Decem- adjustments could be warranted over time.
ber FOMC minutes seemed to affect longer-term yields.
By unanimous vote, the Committee ratified the Desk’s
Far forward real yields moved higher over the period,
domestic transactions over the intermeeting period. No
_____________________________________________________________________________________________
intervention operations occurred in foreign currencies tain and probably would remain so. Consequently, mar-
for the System’s account during the intermeeting period. ket conditions would have to be monitored closely to
determine the appropriate longer-run level of reserves
Principles for Reducing the Size of the Balance
and the size of the balance sheet.
Sheet
Participants continued their discussion of topics associ- Participants agreed that the Committee should reduce
ated with potential adjustments in the Committee’s pol- the Federal Reserve’s securities holdings over time in a
icy tools that may be appropriate to support the achieve- predictable manner primarily by adjusting the amounts
ment of sustained strong labor market conditions and a reinvested of principal payments received from securi-
return of inflation to levels consistent with the Commit- ties held in the SOMA. They also agreed that the SOMA
tee’s longer-run 2 percent objective under a wide range should hold primarily Treasury securities in the longer
of circumstances. At this meeting, participants dis- run. Regarding these two principles, many participants
cussed high-level principles that could be released to the commented that sales of agency MBS or reinvesting
public to describe the Committee’s approach for reduc- some portion of principal payments received from
ing the size of the Federal Reserve’s balance sheet. They agency MBS into Treasury securities may be appropriate
agreed that the principles would address, at a high level, at some point in the future to enable suitable progress
the sequence of adjustments in the interest rate and bal- toward a longer-run SOMA portfolio composition con-
ance sheet tools to reduce policy accommodation, the sisting primarily of Treasury securities.
Committee’s approach to balance sheet runoff, and its
Participants agreed that it was appropriate at this time
intentions for the longer-run size and composition of the
for the Committee to publish its high-level principles for
balance sheet. The participants’ discussion was pre-
reducing the size of the Federal Reserve’s balance sheet.
ceded by a staff presentation that reviewed key consid-
They also agreed that it was important for the Commit-
erations raised by participants at the December FOMC
tee to retain the flexibility to adjust any of the details of
meeting and examined how the proposed set of princi-
its approach in light of changing economic and financial
ples, which reflected those considerations, compared
conditions. Participants noted that the principles would
with the Policy Normalization Principles and Plans is-
serve as an important guide in future deliberations on
sued in 2014.
balance sheet reduction. While no decisions regarding
In their discussion, participants reaffirmed that changes specific details for reducing the size of the balance sheet
in the target range for the federal funds rate are the Com- were made at this meeting, participants agreed to con-
mittee’s primary means for adjusting the stance of mon- tinue their discussions at upcoming meetings.
etary policy, as noted in the Committee’s Statement on
Following the conclusion of the discussion, all partici-
Longer-Run Goals and Monetary Policy Strategy. Par-
pants supported the proposed principles for reducing
ticipants judged that the timing and pace of balance
the size of the balance sheet. The Committee voted
sheet reduction would be determined so as to promote
unanimously to adopt the Principles for Reducing the
the Committee’s maximum-employment and price-sta-
Size of the Federal Reserve’s Balance Sheet, as shown
bility goals and that it would be appropriate to begin the
below.
process of reducing the size of the balance sheet after
the process of increasing the target range for the federal PRINCIPLES FOR REDUCING THE SIZE OF
funds rate has begun. While participants agreed that de- THE FEDERAL RESERVE’S BALANCE SHEET
tails on the timing and pace of balance sheet runoff (As adopted effective January 25, 2022)
would be determined at upcoming meetings, participants
generally noted that current economic and financial con- The Federal Open Market Committee agreed that it is
ditions would likely warrant a faster pace of balance appropriate at this time to provide information regard-
sheet runoff than during the period of balance sheet re- ing its planned approach for significantly reducing the
duction from 2017 to 2019. Participants observed that, size of the Federal Reserve's balance sheet. All partici-
in light of the current high level of the Federal Reserve’s pants agreed on the following elements:
securities holdings, a significant reduction in the size of
the balance sheet would likely be appropriate. Partici- • The Committee views changes in the target
pants noted that the level of securities holdings con- range for the federal funds rate as its pri-
sistent with implementing monetary policy efficiently mary means of adjusting the stance of mon-
and effectively in an ample reserves regime was uncer- etary policy.
_____________________________________________________________________________________________
• The Committee will determine the timing measured by the Job Openings and Labor Turnover Sur-
and pace of reducing the size of the Federal vey, moved down in November but remained well above
Reserve's balance sheet so as to promote its pre-pandemic levels; the quits rate was also elevated.
maximum employment and price stability Weekly estimates of private-sector payrolls, constructed
goals. The Committee expects that reduc- by the Board’s staff using data provided by the payroll
ing the size of the Federal Reserve's balance processor ADP that were available through the first half
sheet will commence after the process of in- of January, pointed to a slower pace of private employ-
creasing the target range for the federal ment gains relative to December. Average hourly earn-
funds rate has begun. ings rose at an annual rate of 6.2 percent over the last
three months of the year; although wage increases were
• The Committee intends to reduce the Fed- widespread across industries, they were particularly no-
eral Reserve's securities holdings over time table in the leisure and hospitality sector as well as the
in a predictable manner primarily by adjust- transportation and warehousing sector.
ing the amounts reinvested of principal pay-
ments received from securities held in the Inflation readings remained high, and various indicators
System Open Market Account (SOMA). suggested that inflationary pressures had broadened
over the second half of 2021. Total PCE price inflation
• Over time, the Committee intends to main- was 5.7 percent over the 12 months ending in Novem-
tain securities holdings in amounts needed ber, and core PCE price inflation, which excludes
to implement monetary policy efficiently changes in consumer energy prices and many consumer
and effectively in its ample reserves regime. food prices, was 4.7 percent over the same period. The
• In the longer run, the Committee intends to trimmed mean measure of 12-month PCE inflation con-
hold primarily Treasury securities in the structed by the Federal Reserve Bank of Dallas was
SOMA, thereby minimizing the effect of 2.8 percent in November, 1 percentage point higher
Federal Reserve holdings on the allocation than its year-earlier rate of increase. In December, the
of credit across sectors of the economy. 12-month change in the consumer price index (CPI) was
7.0 percent, while core CPI inflation was 5.5 percent
• The Committee is prepared to adjust any of over the same period. The staff’s common inflation ex-
the details of its approach to reducing the pectations index, which combines information from
size of the balance sheet in light of eco- many indicators of inflation expectations and inflation
nomic and financial developments. compensation, had largely leveled off over the fall and
Staff Review of the Economic Situation was close to its 2014 average.
The information available at the time of the January 25– Real PCE was unchanged in November, and available
26 meeting suggested that U.S. real gross domestic prod- indicators—including the components of the nominal
uct (GDP) growth had picked up in the fourth quarter retail sales data used to estimate PCE—pointed to a de-
after slowing in the third quarter. Labor market condi- cline in December, possibly reflecting the sharp rise in
tions improved further in December, and indicators of COVID-19 cases in the second half of that month as
labor compensation continued to show robust increases. well as some holiday sales having been pulled forward to
Consumer price inflation through November—as meas- earlier months. Housing demand remained strong, and
ured by the 12-month percentage change in the price in- available indicators suggested that residential investment
dex for personal consumption expenditures (PCE)—re- increased in the fourth quarter. However, shortages of
mained elevated. construction materials, buildable lots, and other inputs
Total nonfarm payroll employment posted a moderate continued to weigh on activity in this sector.
gain in December. The unemployment rate declined Business fixed investment appeared to post only a small
from 4.2 percent in November to 3.9 percent in Decem- gain in the fourth quarter, as investment in transporta-
ber. The unemployment rate for African Americans tion equipment was held back by supply bottlenecks and
moved higher, and the Hispanic unemployment rate de- limited supplies of construction materials restrained
clined; both rates remained well above the national aver- nonresidential structures investment.
age. The labor force participation rate was unchanged
in December, and the employment-to-population ratio Manufacturing output moved down in December after
moved up. The private-sector job openings rate, as advancing strongly in October and November. Motor
_____________________________________________________________________________________________
vehicle assemblies reversed some of their November in- Short-term funding markets were stable, while participa-
crease; in addition, manufacturing production outside of tion in the overnight reverse repurchase agreement
motor vehicles ticked lower. (ON RRP) facility increased further. Market-based fi-
nancing conditions remained accommodative, and bank
Total real government purchases appeared to have fallen
lending standards eased for most loan categories.
in the fourth quarter. Although available data suggested
that real federal purchases rose, indicators of real state The expected path for the federal funds rate over the
and local government purchases pointed to a decline in next few years—implied by a straight read of overnight
the fourth quarter despite state and local governments’ index swap quotes—rose notably since the December
extremely strong budget positions and the widespread FOMC meeting, apparently reflecting less-accommoda-
return to in-person schooling last fall. tive-than-expected FOMC communications and an eas-
ing of concerns around the economic effects of the
The U.S. international trade deficit widened at the end
Omicron variant. Those factors also contributed to no-
of last year. Imports of goods rose sharply in November
table rises in 2-, 5-, and 10-year nominal Treasury yields.
and December, led by increases in consumer goods,
Inflation compensation implied by Treasury Inflation-
while exports of goods were little changed over the two
Protected Securities rose slightly, on net.
months, on net, after surging in October. Shipping con-
gestion and other bottlenecks continued to restrain the Broad equity indexes decreased markedly, on net, partic-
level of trade in goods. Meanwhile, services exports ularly in the latter part of the intermeeting period, as
jumped in November, reflecting a sizable increase in ex- shifts in expectations about the pace of monetary policy
ports of travel services after the reopening of U.S. bor- tightening, global inflationary pressures, and escalating
ders to vaccinated foreign travelers early in the month. tensions between Russia and Ukraine weighed on equity
Even so, services trade was very low relative to pre-pan- prices. The one-month option-implied volatility on the
demic norms, largely because the level of international S&P 500—the VIX—increased considerably, on net, to
travel remained depressed. above the 90th percentile of its historical distribution.
Incoming data suggested that foreign economic growth Spreads of investment- and speculative-grade corporate
picked up in the fourth quarter of 2021 as economies in bonds widened modestly. Spreads of municipal bonds
emerging Asia bounced back from lockdowns in the were roughly unchanged.
third quarter induced by the Delta variant of the Short-term funding markets were stable over the inter-
COVID-19 virus. Purchasing managers indexes (PMIs) meeting period. The effective federal funds rate and the
pointed to improved supplier delivery times, and foreign Secured Overnight Financing Rate generally held steady
vehicle production rose notably, suggesting that supply at 8 basis points and 5 basis points, respectively. Partic-
bottlenecks continued to ease somewhat. However, the ipation in ON RRP operations averaged $1.6 trillion,
rapid spread of the Omicron variant led to renewed pub- about $150 billion higher than during the previous inter-
lic health restrictions in several countries, particularly in meeting period, and reached an all-time high of $1.9 tril-
China, and appeared to be weighing on activity at the lion at year-end. Government money market funds con-
start of the year. Inflation abroad continued to rise, tinued to receive investment inflows and accounted for
mostly driven by further increases in retail energy prices, the majority of ON RRP take-up.
effects from supply bottlenecks, and, in some emerging
market economies (EMEs), by rising food prices. That Over the intermeeting period, movements in foreign as-
set prices responded to waning concerns about the Omi-
said, input and output price components of PMIs pro-
vided some tentative signs that easing supply constraints cron variant’s potential economic effects and firming
have started to contribute to some letup in inflationary views that monetary accommodation in several ad-
pressures in several foreign economies. vanced economies will be removed at a faster pace than
previously expected. Some market participants also
Staff Review of the Financial Situation pointed to rising geopolitical tensions related to Russia
Over the intermeeting period, easing concerns around as contributing to the moves. On net, AFE sovereign
the economic effects of the Omicron variant and FOMC yields increased notably, most major foreign equity in-
communications that were viewed as less accommoda- dexes declined moderately, and the broad dollar index
tive than expected contributed to increases in Treasury decreased modestly. EME sovereign spreads widened,
yields. Long-term sovereign yields in AFEs also rose no- and capital flows into EME-dedicated bond funds re-
tably. Broad domestic equity indexes decreased mark- mained slightly negative, while flows into EME equity
edly, and spreads of corporate bonds widened modestly. funds turned positive.
_____________________________________________________________________________________________
In domestic credit markets, financing conditions for who met standard conforming loan criteria. In the Jan-
nonfinancial firms remained broadly accommodative. uary SLOOS, banks reported easing lending standards
Gross issuance of corporate bonds and leveraged loans for most mortgage categories in the fourth quarter.
remained solid but slowed somewhat in December, re- Mortgage rates increased over the intermeeting period in
flecting seasonal factors. Equity funding raised through line with rates on agency MBS and 10-year Treasury se-
initial public offerings continued at a strong pace in No- curities but remained low by historical standards. The
vember and December, while equity issuance through fraction of mortgage borrowers missing payments con-
special purpose acquisition companies remained muted tinued to decline through November.
relative to earlier in 2021.
Financing conditions for consumer credit remained ac-
Commercial and industrial (C&I) loans expanded over commodative for most borrowers, especially those with
the fourth quarter following more than a year of de- higher credit scores. Lending standards for nonprime
clines. In the January Senior Loan Officer Opinion Sur- consumers in the credit card market continued to ease
vey on Bank Lending Practices (SLOOS), banks re- from the tight levels seen earlier in the pandemic. Banks
ported easier standards and stronger demand for C&I reported in the January SLOOS that demand for credit
loans over the fourth quarter. card loans strengthened over the fourth quarter, while
lending standards eased for auto loans amid a weakening
The credit quality of large nonfinancial corporations re-
in demand. With sales running low because of con-
mained strong over the intermeeting period. The vol-
strained supply, auto loan growth continued to slow in
umes of nonfinancial corporate bond and leveraged loan
October and November from the more rapid pace rec-
upgrades exceeded those of downgrades in November
orded in the first half of the year.
and December. Trailing default rates on nonfinancial
bonds edged down further to historical lows, while mar- The staff provided an update on its assessments of the
ket indicators of future expected default rates remained stability of the financial system and, on balance, charac-
benign and historically low. terized the financial vulnerabilities of the U.S. financial
system as notable. The staff judged that asset valuation
In the municipal bond market, financing conditions re-
pressures remained elevated. In particular, the forward
mained accommodative, as municipal bond yields stayed
price-to-earnings ratio for the S&P 500 index stood at
near historical lows. Issuance of municipal debt was
the upper end of its historical distribution; high-yield
strong in November and December. The credit quality
corporate bond spreads and the excess loan premium for
of municipal debt remained stable, and the volume of
leveraged loans remained at low levels; and house prices
defaults stayed low.
grew strongly, with price-to-rent ratios that were at ele-
Financing conditions for small businesses eased a bit vated levels. The staff noted that the market capitaliza-
over the intermeeting period. In the January SLOOS, tion of crypto-assets had grown significantly over the
small banks reported easing C&I loan standards to small past decade and had experienced considerable volatility,
firms over the fourth quarter. Loan originations to small including sizable declines since late last year. The staff
businesses rose in November to near pre-pandemic lev- changed its assessment of vulnerabilities associated with
els. Banks in the January SLOOS reported stronger loan nonfinancial leverage from notable to moderate, noting
demand by small firms over the fourth quarter, though that measures of business leverage had declined to pre-
loan demand remained weak overall. pandemic levels. Household delinquency rates remained
relatively low, while household borrowing rose but was
Commercial real estate (CRE) loan balances on banks’
concentrated among prime borrowers. Vulnerabilities
books expanded at a solid pace in the fourth quarter,
arising from financial leverage remained moderate.
and, in the January SLOOS, banks reported an easing of
Risk-based capital ratios for banks remained above their
standards on such loans amid stronger demand for most
pre-pandemic levels even after the resumption of share-
CRE loan categories. Issuance of non-agency commer-
holder payouts. In contrast, some available measures of
cial mortgage-backed securities (CMBS) surged in the
hedge fund leverage continued to increase, and im-
fourth quarter, while issuance of agency CMBS slowed.
portant data gaps continued to limit a full assessment of
Delinquency rates on mortgages in CMBS pools contin-
vulnerabilities posed by many nonbank financial institu-
ued to fall but remained elevated for hotel and retail
tions. Vulnerabilities associated with funding risks were
mortgages.
characterized as moderate. Prime and tax-exempt
In the residential mortgage market, financing conditions money funds continued to have structural vulnerabilities
remained accommodative, particularly for borrowers that may lead investors to withdraw funds quickly in a
_____________________________________________________________________________________________
stress situation and were a potential source of spillovers viewed as an important source of downside risk to activ-
to other short-term funding markets. In response, the ity, while the possibility of more severe and more persis-
Securities and Exchange Commission proposed reforms tent supply issues was viewed as an additional downside
in December 2021 to make these funds more resilient. risk to activity and as an upside risk to inflation.
Another vulnerability in funding markets was the signif-
Participants’ Views on Current Conditions and the
icant growth in stablecoin arrangements over the past
Economic Outlook
few years, which may increase challenges related to run
In their discussion of current economic conditions, par-
risk and pose additional risks from their potential role as
ticipants noted that indicators of economic activity and
a means of payment.
employment had continued to strengthen. The sectors
Staff Economic Outlook most adversely affected by the pandemic had improved
The near-term projection for U.S. economic activity pre- in recent months but continued to be affected by the re-
pared by the staff for the January FOMC meeting was cent sharp rise in COVID-19 cases. Job gains had been
weaker than in December, reflecting the sharp rise in solid in recent months, and the unemployment rate had
COVID-19 infections caused by the rapid spread of the declined substantially. Supply and demand imbalances
Omicron variant and an assessment that supply con- related to the pandemic and the reopening of the econ-
straints would resolve more slowly than previously ex- omy had continued to contribute to elevated levels of
pected. Although real GDP still appeared to have inflation. Overall financial conditions had remained ac-
posted a sizable gain in the fourth quarter of 2021, out- commodative, in part reflecting policy measures to sup-
put growth was expected to slow noticeably in the first port the economy and the flow of credit to U.S. house-
quarter of 2022 before picking up again later in the year holds and businesses. Participants judged that the path
as COVID-19 cases declined and supply issues contin- of the economy continued to depend on the course of
ued to be resolved. With most of the boost to growth the virus. Progress on vaccinations and an easing of sup-
from the reopening of the economy and easing of supply ply constraints were expected to support continued
constraints expected to occur in 2022, real GDP growth gains in economic activity and employment as well as a
was projected to step down in 2023 and to be roughly in reduction in inflation. Risks to the economic outlook
line with potential growth in 2023 and 2024. However, remained, including from new variants of the virus.
the level of real GDP was expected to remain well above
With regard to the economic outlook, participants
potential throughout the projection period, and labor
agreed that the Omicron wave of the pandemic would
market conditions were expected to remain very tight.
weigh on economic activity in the first quarter of 2022.
The staff’s near-term projection for PCE price inflation Indeed, sectors of the economy that are particularly sen-
was revised up relative to December in response to the sitive to pandemic-related disruptions, including travel,
anticipated slower resolution of supply issues. In partic- leisure, and restaurants, were experiencing sharp reduc-
ular, the staff continued to expect that monthly inflation tions in activity as a result of the Omicron wave. Partic-
rates would move lower as supply constraints eased, but ipants commented that, for many afflicted individuals
the projected step-down was less pronounced than in and families, the virus continued to cause great hardship.
the December forecast. Even so, an improvement in Participants concurred that if the Omicron wave dissi-
supply conditions and a decline in consumer energy pated quickly, then economic activity would likely
prices were expected to slow PCE price inflation to strengthen rapidly and economic growth for 2022 as a
2.6 percent in 2022. With supply conditions expected to whole would be robust. Participants cited strong house-
normalize further but with the labor market expected to hold balance sheets, rising wages, and effective adapta-
remain very tight, PCE price inflation was projected to tion to the pandemic by the business sector as factors
decline to 2 percent in 2023 before edging up to 2.1 per- supporting the outlook for strong growth this year.
cent in 2024. However, a number of participants noted that there was
a risk that additional variants could weigh on economic
The staff continued to judge that the risks to the baseline
activity this year.
projection for economic activity were skewed to the
downside and that the risks to the inflation projection Participants noted that supply chain bottlenecks and la-
were skewed to the upside. In particular, the possibility bor shortages had continued to limit businesses’ ability
that the economic effects of the virus would turn out to to meet strong demand, with these challenges exacer-
be larger than assumed in the baseline projection was bated by the emergence and spread of the Omicron var-
iant. In particular, the Omicron wave had led to much
_____________________________________________________________________________________________
more widespread worker absences due to illness, virus Participants noted that their District contacts were re-
exposure, or caregiving needs, which had curtailed activ- porting that labor demand remained historically strong
ity in many sectors including airlines, trucking, and ware- and that labor supply remained constrained, resulting in
housing. Some participants reported that their business a broad shortage of workers across many parts of the
contacts were hopeful that the effects of the Omicron economy. As a result, there was widespread evidence
wave would be relatively short lived. Nevertheless, sev- that the labor market was very tight, including near-rec-
eral participants reported that their contacts expected ord rates of quits and job vacancies as well as nominal
the ongoing labor shortages and other supply constraints wage growth that was the highest recorded in decades.
to persist well after the acute effects of the Omicron Several participants reported that District business con-
wave had waned. Participants’ contacts also reported tacts were either planning to implement or had imple-
continued widespread input cost pressures, which, amid mented larger wage increases than those of recent years
generally robust demand, they reported having largely to retain current employees or attract new workers. A
been able to pass on to their customers. A few partici- few participants also reported contacts having been
pants commented that agricultural businesses were ex- forced to reduce operating hours or close businesses
periencing higher input costs, and those higher costs temporarily because of labor shortages.
were putting strain on the finances of those firms even
Acknowledging that the maximum level of employment
as they experienced generally strong demand for their
consistent with price stability evolves over time, partici-
products.
pants expressed a range of views regarding their assess-
In their discussion of the household sector, many partic- ments of current labor market conditions relative to the
ipants noted that the onset of the Omicron wave had Committee’s goal of maximum employment. Many par-
damped consumer demand, particularly for services, ticipants commented that they viewed labor market con-
with much of the recent weakness concentrated in high- ditions as already at or very close to those consistent
contact sectors such as travel, dining, and leisure and with maximum employment, citing indications of strong
hospitality. Almost all of those participants anticipated labor markets including the low levels of unemployment
that household demand would recover briskly if the rates, elevated wage pressures, near-record levels of job
Omicron wave subsided quickly, with spending sup- openings and quits, and a broad shortage of workers
ported by strong household balance sheets that were across many parts of the economy. A couple of partici-
bolstered by high rates of saving earlier in the pandemic pants commented that, in their view, the economy likely
and ongoing robust gains in labor income. had not yet reached maximum employment, noting that,
even for prime-age workers, labor force participation
Participants noted that the labor market had made re-
rates were still lower than those that prevailed before the
markable progress in recovering from the recession as-
pandemic or that a reallocation of labor across sectors
sociated with the pandemic and, by most measures, was
could lead to higher levels of employment over time.
now very strong. Increases in employment had been
solid in recent months; the unemployment rate had de- Participants remarked that recent inflation readings had
clined sharply, reaching 3.9 percent in December; job continued to significantly exceed the Committee’s
openings and quits were near record high levels; and longer-run goal and elevated inflation was persisting
nominal wages were rising at the fastest pace in decades. longer than they had anticipated, reflecting supply and
Several participants commented that the gains, on bal- demand imbalances related to the pandemic and the re-
ance, over recent months had been broad based, with opening of the economy. However, some participants
notable improvements for lower-wage workers as well as commented that elevated inflation had broadened be-
African Americans and Hispanics. Against this back- yond sectors most directly affected by those factors, bol-
drop of a generally strong and improving labor market, stered in part by strong consumer demand. In addition,
many participants observed that the effects of the Omi- various participants cited other developments that had
cron variant likely would only temporarily suppress the the potential to place additional upward pressure on in-
rate of labor market gains. The labor force participation flation, including real wage growth in excess of produc-
rate had edged up further over the past few months, and tivity growth and increases in prices for housing services.
some participants indicated that they expected it to con- Participants acknowledged that elevated inflation was a
tinue to increase as the pandemic eased. A couple of burden on U.S. households, particularly those who were
participants noted that the participation rate remained least able to pay higher prices for essential goods and
lower than trend levels that account for changing de- services. Some participants reported that their business
mographics.
_____________________________________________________________________________________________
contacts remained concerned about persistently high in- increase in mortgage debt as suggesting that the financial
flation and that they were adjusting their business prac- system might prove resilient to shocks. Some partici-
tices to cope with higher input costs—for instance, by pants saw emerging risks to financial stability associated
raising output prices or utilizing contracts that were con- with the rapid growth in crypto-assets and decentralized
tingent on their costs. Participants generally expected finance platforms. A few participants pointed to risks
inflation to moderate over the course of the year as sup- associated with highly leveraged, nonbank financial in-
ply and demand imbalances ease and monetary policy stitutions or the potential vulnerability of prime money
accommodation is removed. Some participants re- market funds to a sudden withdrawal of liquidity.
marked that longer-term measures of inflation expecta-
In their consideration of the stance of monetary policy,
tions appeared to remain well anchored, which would
participants agreed that it would be appropriate for the
support a return of inflation over time to levels con-
Committee to keep the target range for the federal funds
sistent with the Committee’s goals.
rate at 0 to ¼ percent in support of the Committee’s ob-
In their discussion of risks to the outlook, participants jectives of maximum employment and inflation at the
agreed that uncertainty regarding the path of inflation rate of 2 percent over the longer run. They also antici-
was elevated and that risks to inflation were weighted to pated that it would soon be appropriate to raise the tar-
the upside. Participants cited several such risks, includ- get range. In discussing why beginning to remove policy
ing the zero-tolerance COVID-19 policy in China that accommodation could soon be warranted, participants
had the potential to further disrupt supply chains, the noted that inflation continued to run well above 2 per-
possibility of geopolitical turmoil that could cause in- cent and generally judged the risks to the outlook for in-
creases in global energy prices or exacerbate global sup- flation as tilted to the upside. Participants also assessed
ply shortages, a worsening of the pandemic, persistent that the labor market was strong, having made substan-
real wage growth in excess of productivity growth that tial, broad-based progress over the past year.
could trigger inflationary wage–price dynamics, or the
In light of elevated inflation pressures and the strong la-
possibility that longer-term inflation expectations could
bor market, participants continued to judge that the
become unanchored. A few participants pointed to the
Committee’s net asset purchases should be concluded
possibility that structural factors that had contributed to
soon. Most participants preferred to continue to reduce
low inflation in the previous decade, such as technolog-
the Committee’s net asset purchases according to the
ical changes, demographics, and a low real interest rate
schedule announced in December, bringing them to an
environment, may reemerge when the effects of the pan-
end in early March. A couple of participants stated that
demic abate. Uncertainty about real activity was also
they favored ending the Committee’s net asset purchases
seen as elevated. Various participants noted downside
sooner to send an even stronger signal that the Commit-
risks to the outlook, including a possible worsening of
tee was committed to bringing down inflation.
the pandemic, the potential for escalating geopolitical
tensions, or a substantial tightening in financial condi- Participants discussed the implications of the economic
tions. outlook for the likely timing and pace for removing pol-
icy accommodation. Compared with conditions in 2015
Participants who commented on issues related to finan-
when the Committee last began a process of removing
cial stability cited a number of factors that could repre-
monetary policy accommodation, participants viewed
sent potential vulnerabilities to the financial system. A
that there was a much stronger outlook for growth in
few participants noted that asset valuations were ele-
economic activity, substantially higher inflation, and a
vated across a range of markets and raised the concern
notably tighter labor market. Consequently, most par-
that a major realignment of asset prices could contribute
ticipants suggested that a faster pace of increases in the
to a future downturn. A couple of these participants
target range for the federal funds rate than in the post-
judged that prolonged accommodative financial condi-
2015 period would likely be warranted, should the econ-
tions could be contributing to financial imbalances. A
omy evolve generally in line with the Committee’s ex-
couple of other participants cited reasons why elevated
pectation. Even so, participants emphasized that the ap-
asset valuations might prove to be less of a threat to fi-
propriate path of policy would depend on economic and
nancial stability than in past reversals of asset prices. In
financial developments and their implications for the
particular, they noted the relatively healthy balance sheet
outlook and the risks around the outlook, and they will
positions of households and nonfinancial firms, the well-
be updating their assessments of the appropriate setting
capitalized and liquid banking sector, and the fact that
for the policy stance at each meeting. Participants noted
the rise in housing prices was not being fueled by a large
_____________________________________________________________________________________________
that the removal of policy accommodation in current cir- activity and employment as well as a reduction in infla-
cumstances depended on the timing and pace of both tion, but risks to the economic outlook remained, in-
increases in the target range of the federal funds rate and cluding from new variants of the virus.
the reduction in the size of the Federal Reserve’s balance
In order to support the Committee’s maximum-employ-
sheet. In this context, a number of participants com-
ment and price-stability objectives, members agreed to
mented that conditions would likely warrant beginning
keep the target range for the federal funds rate at
to reduce the size of the balance sheet sometime later
0 to ¼ percent. With inflation well above 2 percent and
this year.
a strong labor market, members expected that it would
In their discussion of the outlook for monetary policy, soon be appropriate to raise the target range for the fed-
many participants noted the influence on financial con- eral funds rate. Members agreed to continue to reduce
ditions of the Committee’s recent communications and the monthly pace of the Committee’s net asset pur-
viewed these communications as helpful in shifting pri- chases, bringing them to an end in early March. Specif-
vate-sector expectations regarding the policy outlook ically, beginning in February, the Committee would in-
into better alignment with the Committee’s assessment crease its holdings of Treasury securities by at least
of appropriate policy. Participants continued to stress $20 billion per month and of agency MBS by at least
that maintaining flexibility to implement appropriate $10 billion per month. Members noted that the Federal
policy adjustments on the basis of risk-management Reserve’s ongoing asset purchases and holdings of secu-
considerations should be a guiding principle in conduct- rities would continue to foster smooth market function-
ing policy in the current highly uncertain environment. ing and accommodative financial conditions, thereby
Most participants noted that, if inflation does not move supporting the flow of credit to households and busi-
down as they expect, it would be appropriate for the nesses.
Committee to remove policy accommodation at a faster
Members agreed that, in assessing the appropriate stance
pace than they currently anticipate. Some participants
of monetary policy, they would continue to monitor the
commented on the risk that financial conditions might
implications of incoming information for the economic
tighten unduly in response to a rapid removal of policy
outlook and that they would be prepared to adjust the
accommodation. A few participants remarked that this
stance of monetary policy as appropriate in the event
risk could be mitigated through clear and effective com-
that risks emerged that could impede the attainment of
munication of the Committee’s assessments of the eco-
the Committee’s goals. They also concurred that, in as-
nomic outlook, the risks around the outlook, and the ap-
sessing the appropriate stance of monetary policy, they
propriate path for monetary policy.
would take into account a wide range of information, in-
Committee Policy Action cluding readings on public health, labor market condi-
In their discussion of monetary policy for this meeting, tions, inflation pressures and inflation expectations, and
members agreed that indicators of economic activity and financial and international developments.
employment had continued to strengthen. They noted
Members agreed to remove the opening sentence from
that the sectors most adversely affected by the pandemic
previous postmeeting statements regarding using the
had improved in recent months but were being affected
Federal Reserve’s full range of tools to support the U.S.
by the recent sharp rise in COVID-19 cases. Job gains
economy. This language was adopted during the height
had been solid in recent months, and the unemployment
of the financial market turmoil in March 2020, when the
rate had declined substantially. Members remarked that
Committee began its asset purchase program, and mem-
supply and demand imbalances related to the pandemic
bers acknowledged that it was no longer warranted in
and the reopening of the economy had continued to
light of the strong economy as well as the Committee’s
contribute to elevated levels of inflation. Overall finan-
announcement that net asset purchases would end in
cial conditions remained accommodative, in part reflect-
early March. Members agreed that the postmeeting
ing policy measures to support the economy and the
statement should be updated to reflect the Committee’s
flow of credit to U.S. households and businesses. Mem-
expectation that it would soon be appropriate to raise
bers also acknowledged that the path of the economy
the target range for the federal funds rate in light of ele-
continued to depend on the course of the virus. Pro-
vated inflation pressures and the strong labor market.
gress on vaccinations and an easing of supply constraints
were expected to support continued gains in economic At the conclusion of the discussion, the Committee
voted to authorize and direct the Federal Reserve Bank
of New York, until instructed otherwise, to execute
_____________________________________________________________________________________________
transactions in the SOMA in accordance with the fol- The vote also encompassed approval of the state-
lowing domestic policy directive, for release at 2:00 p.m.: ment below for release at 2:00 p.m.:
“Effective January 27, 2022, the Federal Open “Indicators of economic activity and employ-
Market Committee directs the Desk to: ment have continued to strengthen. The sec-
tors most adversely affected by the pandemic
• Undertake open market operations as nec- have improved in recent months but are being
essary to maintain the federal funds rate in affected by the recent sharp rise in COVID-19
a target range of 0 to ¼ percent. cases. Job gains have been solid in recent
• Complete the increase in System Open months, and the unemployment rate has de-
Market Account (SOMA) holdings of clined substantially. Supply and demand imbal-
Treasury securities by $40 billion and of ances related to the pandemic and the reopening
agency mortgage-backed securities (MBS) of the economy have continued to contribute to
by $20 billion, as indicated in the monthly elevated levels of inflation. Overall financial
purchase plans released in mid-January. conditions remain accommodative, in part re-
flecting policy measures to support the econ-
• Increase the SOMA holdings of Treasury omy and the flow of credit to U.S. households
securities by $20 billion and of agency MBS and businesses.
by $10 billion, during the monthly purchase
period beginning in mid-February. The path of the economy continues to depend
on the course of the virus. Progress on vaccina-
• Increase holdings of Treasury securities and tions and an easing of supply constraints are ex-
agency MBS by additional amounts as pected to support continued gains in economic
needed to sustain smooth functioning of activity and employment as well as a reduction
markets for these securities. in inflation. Risks to the economic outlook re-
main, including from new variants of the virus.
• Conduct overnight repurchase agreement
operations with a minimum bid rate of The Committee seeks to achieve maximum em-
0.25 percent and with an aggregate opera- ployment and inflation at the rate of 2 percent
tion limit of $500 billion; the aggregate op- over the longer run. In support of these goals,
eration limit can be temporarily increased at the Committee decided to keep the target range
the discretion of the Chair. for the federal funds rate at 0 to ¼ percent.
With inflation well above 2 percent and a strong
• Conduct overnight reverse repurchase labor market, the Committee expects it will
agreement operations at an offering rate of soon be appropriate to raise the target range for
0.05 percent and with a per-counterparty the federal funds rate. The Committee decided
limit of $160 billion per day; the per-coun- to continue to reduce the monthly pace of its
terparty limit can be temporarily increased net asset purchases, bringing them to an end in
at the discretion of the Chair. early March. Beginning in February, the Com-
• Roll over at auction all principal payments mittee will increase its holdings of Treasury se-
from the Federal Reserve’s holdings of curities by at least $20 billion per month and of
Treasury securities and reinvest all principal agency mortgage‑backed securities by at least
payments from the Federal Reserve’s hold- $10 billion per month. The Federal Reserve’s
ings of agency debt and agency MBS in ongoing purchases and holdings of securities
agency MBS. will continue to foster smooth market function-
ing and accommodative financial conditions,
• Allow modest deviations from stated thereby supporting the flow of credit to house-
amounts for purchases and reinvestments, holds and businesses.
if needed for operational reasons.
In assessing the appropriate stance of monetary
• Engage in dollar roll and coupon swap policy, the Committee will continue to monitor
transactions as necessary to facilitate settle- the implications of incoming information for
ment of the Federal Reserve’s agency MBS the economic outlook. The Committee would
transactions.” be prepared to adjust the stance of monetary
_____________________________________________________________________________________________
policy as appropriate if risks emerge that could paid on reserve balances at 0.15 percent, effective Janu-
impede the attainment of the Committee’s ary 27, 2022. The Board also voted unanimously to ap-
goals. The Committee’s assessments will take prove the establishment of the primary credit rate at the
into account a wide range of information, in- existing level of 0.25 percent.
cluding readings on public health, labor market
It was agreed that the next meeting of the Committee
conditions, inflation pressures and inflation ex-
would be held on Tuesday–Wednesday, March 15–16,
pectations, and financial and international de-
2022. The meeting adjourned at 10:10 a.m. on Janu-
velopments.”
ary 26, 2022.
Voting for this action: Jerome H. Powell, Chair; John
Notation Vote
C. Williams, Vice Chair; Michelle W. Bowman; Lael
By notation vote completed on January 4, 2022, the
Brainard; James Bullard; Esther L. George; Patrick
Committee unanimously approved the minutes of the
Harker; Loretta J. Mester; and Christopher J. Waller.
Committee meeting held on December 14–15, 2021.
Voting against this action: None.
Patrick Harker voted as an alternate member at this
meeting.
_______________________
Consistent with the Committee’s decision to leave the
James A. Clouse
target range for the federal funds rate unchanged, the
Secretary
Board voted unanimously to maintain the interest rate

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_____________________________________________________________________________________________

Minutes of the Federal Open Market Committee

3 Attended Tuesday’s session only. 4 Committee organizational documents are available at

AUTHORIZATION FOR FOREIGN CURRENCY STANDALONE SPOT AND FORWARD TRANS-

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