- Prior range was 4.25-4.50%
- No change to rates was 99% priced in
- Removes line in the statement that said ‘risks to the outlook roughly in balance’
- Labor market conditions remain solid
- Inflation remains somewhat elevated
- GDP forecast this year to 1.7% from 2.1%
- Beginning in April, the Committee will slow the pace of decline of its
securities holdings by reducing the monthly redemption cap on Treasury
securities from $25 billion to $5 billion (Waller dissented to this) - The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion.
Reversing a big portion of the QT may be seen as dovish.
Prior to the decision, the market is pricing in 55 basis points of Fed easing this year. USD/JPY was trading at 149.92 ahead of the data.
This article was written by Adam Button at www.forexlive.com.