Archives of “April 28, 2021” dayrss
FOMC statement from April 27, 2021 meeting (there are no revisions to growth, employment, inflation or dot plot)
For release at 2:00 p.m. EDT
The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals.
The COVID-19 pandemic is causing tremendous human and economic hardship across the United States and around the world. Amid progress on vaccinations and strong policy support, indicators of economic activity and employment have strengthened. The sectors most adversely affected by the pandemic remain weak but have shown improvement. Inflation has risen, largely reflecting transitory factors. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.
The path of the economy will depend significantly on the course of the virus, including progress on vaccinations. The ongoing public health crisis continues to weigh on the economy, and risks to the economic outlook remain.
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With inflation running persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer‑term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved. The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time. In addition, the Federal Reserve will continue to increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgage‑backed securities by at least $40 billion per month until substantial further progress has been made toward the Committee’s maximum employment and price stability goals. These asset purchases help foster smooth market functioning and accommodative financial conditions, thereby supporting the flow of credit to households and businesses.
In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate 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 readings on public health, labor market conditions, inflation pressures and inflation expectations, and financial and international developments.
Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Thomas I. Barkin; Raphael W. Bostic; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Mary C. Daly; Charles L. Evans; Randal K. Quarles; and Christopher J. Waller.
Highlights of the Federal Reserve statement on April 28, 2021:
- Previous statement (March 17)
- Fed funds rate unchanged at 0.00% to 0.25% as universally expected
- “Amid progress on vaccinations and strong policy support, indicators of economic activity ad employment have strengthened”
- Inflation rise largely reflects transitory factors
- The sectors most adversely affected by the pandemic remain weak but have shown improvement
- The ongoing public health crisis continues to weigh on the economy, and risks to the economic outlook remain
- Repeats guidance that “The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time”
- QE will continue at $120B monthly pace
- Repeats that “The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals”
The medium term picture is bullish on demand and tighter on supply
Fed jitters fade
Weekly oil inventory data
- Prior was +594K
- Gasoline +92K vs -50K expected
- Distillates -3342K vs -1244K expected
- Refinery utilization +0.40% vs +0.25% expected
- Production estimate 10.9 mbpd vs 10.9 mbpd prior
API data from late yesterday:
- Crude +4319K
- Gasoline -1288K
- Distillates -2417K
The top tax rate on capital gains will be 39.6%
The plan will also eliminate long-standing loopholes, including lower taxes on capital gains and dividends for the wealthy, that reward wealth over work…
The President’s plan restores the top tax bracket to what it was before the 2017 law, returning the rate to 39.6 percent, applying only to those within the top one percent…
Households making over $1 million-the top 0.3 percent of all households-will pay the same 39.6 percent rate on all their income, equalizing the rate paid on investment returns and wages.
This mainly just reaffirms the story from last week here and it is something that Biden had already talked up during his campaigning when running for president.
EU lawmaker, Guy Verhofstadt, tweets on the matter
The @Europarl_EN approves the EU – UK trade & cooperation agreement ! The first trade deal in history to put up barriers & remove freedoms? A failure for both sides, but better than nothing. I still believe one day an ambitious young politician will want UK to lead in EU again !
10-year yields in Germany climb to -0.215%, its highest since 26 February
Kyodo News reports on the matter