S&P500

Economic activity and employment indicators have continued to strengthen. The sectors most affected by the pandemic have improved in recent months. However, they have been affected by the recent spike in COVID-19 cases. Job gains have been steady in recent months and unemployment rates have fallen significantly. The supply-demand imbalance related to the pandemic and the resumption of economic activity has continued to contribute to higher inflation. Overall, financial conditions remain favourable, partly reflecting policy measures to support the economy and the flow of credit to US households and businesses.

The path of the economy continues to depend on the course of the virus. Progress on vaccination and easing of supply constraints are expected to further boost economic activity and employment, as well as lower inflation. Risks to the economic outlook remain, including from new variants of the virus.

The Committee aims to achieve maximum employment and inflation at the rate of 2% over the longer run. In support of these goals, the Committee decided to keep the target range for the federal funds rate at 0% to 1/4%. With inflation well above 2% and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate. The Committee decided to continue to reduce the monthly pace of net asset purchases, bringing them to an end in early March. Beginning in February, the Committee will increase its holdings of Treasury securities by at least $20 billion per month and agency mortgage-backed securities by at least $10 billion per month.

In assessing the appropriate monetary policy stance, the Committee will continue to monitor the implications of incoming information on the economic outlook. The Committee would be prepared to adjust the monetary policy stance accordingly if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including public health indicators, labour market conditions, inflationary pressures and inflationary expectations, as well as financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michelle W. Bowman; Lael Brainard; James Bullard; Esther L. George; Patrick Harker; Loretta J. Mester; and Christopher J. Waller. Patrick Harker voted as an alternate member at this meeting.