Fed Meeting Focus 3 Words Let U.S. Stocks Rise to New Highs

The Federal Open Market Committee (FOMC) of the US Federal Open Market Committee (FOMC) stated after the meeting that because the controversial “three words” were retained, it was concluded that the doves still had the upper hand. The three major U.S. stock indexes turned up or expanded their gains after falling, hitting a record high again.

The Federal Council declares that the disputed “three words” are reserved
The Federal Open Market Committee (FOMC) of the United States Federal Reserve announced today that it will begin to reduce the scale of bond purchases later in November. This is the first step to take back the large-scale economic support policy of the epidemic era.

On the whole, the post-meeting statement has three main points: explaining the reduction in the pace of debt purchases, not raising interest rates but it seems possible to speculate on the possible timing of interest rate hikes, and the “three words” that have been retained.

The statement pointed out that U.S. Treasury bonds and real estate mortgage securities will be reduced by 10 billion U.S. dollars and 5 billion U.S. dollars each month.

The statement that was unanimously agreed by the participants pointed out that in view of the fact that the US economy has made substantial progress towards the goals of the committee, it has made a response. However, it is also emphasized that the Fed has no predetermined course, and if necessary, it will still adjust the pace of debt purchases in accordance with the economic outlook. To put it bluntly, it may shrink faster, or it may slow down.

As everything was in line with market expectations, after the US FOMC issued a meeting statement, Dow Jones turned from a decline to a rise in midday, and Nasdaq expanded its gains. At the close of the market, the three major indexes each closed at a record high.

The Fed basically maintains its view on inflation. Although it admits that prices have risen faster than expected and lasted for a longer period of time, it still does not remove the term “transitory” that has always caused controversy.

The statement said, “Inflation has accelerated, but it mainly reflects temporary factors. The unbalanced supply and demand related to the epidemic and the economic restart have caused prices in certain industries to rise to a considerable extent.”

 

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Fed Meeting Focus, 3 Words Let U.S. Stocks Rise to New Highs - /10

Summary

The Federal Open Market Committee (FOMC) of the US Federal Open Market Committee (FOMC) stated after the meeting that because the controversial "three words" were retained, it was concluded that the doves still had the upper hand.

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