In comparing Wednesday’s Federal Open Market Committee (FOMC) statement with the one issued after the Fed’s previous policymaking meeting in June, several key changes can be observed. The new statement includes red text that is underlined to signify new information, while text removed from the June statement is crossed out with a horizontal line. The FOMC statement highlights the Federal Reserve’s continued commitment to supporting the economy amid the ongoing COVID-19 pandemic.
One key change in the new statement is the Fed’s acknowledgment of recent improvements in economic activity and employment. The FOMC noted that economic activity and employment have picked up in recent months, although they remain well below their levels at the beginning of the year. This marks a significant shift from the June statement, which highlighted the sharp declines in economic activity and employment due to the pandemic.
The FOMC also reiterated its commitment to using its full range of tools to support the economy during these challenging times. This includes maintaining the Federal Reserve’s target range for the federal funds rate at 0 to 0.25 percent and continuing its asset purchase program to help foster smooth market functioning and accommodative financial conditions. The Fed’s actions are aimed at promoting maximum employment and price stability in the long run.
Another notable change in the new statement is the Fed’s decision to extend its lending programs that were established in response to the pandemic. The FOMC reiterated its commitment to using these programs to provide support to households, businesses, and the broader economy. The extension of these programs reflects the Fed’s ongoing efforts to mitigate the economic impact of the pandemic and ensure the smooth functioning of financial markets.
Federal Reserve Chair Jerome Powell emphasized the importance of additional fiscal support to complement the Fed’s monetary policy efforts. Powell noted that further fiscal stimulus is needed to support households and businesses that continue to face challenges due to the pandemic. The Fed’s actions are designed to work in concert with fiscal policy measures to help the economy recover and sustain its growth momentum.
Overall, the comparison of Wednesday’s FOMC statement with the June statement highlights the Federal Reserve’s evolving response to the ongoing economic challenges posed by the COVID-19 pandemic. The new statement reflects the Fed’s recognition of recent improvements in economic activity and employment, while also underscoring the need for continued policy support to help the economy recover. The Fed’s commitment to using its full range of tools and extending its lending programs demonstrates its determination to support the economy and promote maximum employment and price stability in the long run. Additionally, Powell’s call for further fiscal support underscores the importance of a coordinated policy response to address the economic fallout from the pandemic.
