By Tom Burnett CFA
On January 26, 2022, the Federal Reserve Open Market Committee issued its Statement following its January meeting. The Fed decided to hold rates steady with target Fed Funds rate of 0-.25%, but indicated that “it will soon be appropriate to raise the target range for the Fed Funds rate.” In addition, the Fed announced that it will be ending its asset purchase program in early March. Its goal will be to reduce the holdings of Treasuries and mortgage-backed securities by letting the maturities run off as scheduled without reinvesting the proceeds. The Fed’s balance sheet now carries assets of more than $8 trillion compared to just $4 trillion two years ago. The policy statement was approved by a unanimous vote of the sitting Fed members.
The next FOMC meeting will be held on March 15-16, 2022.