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Fed moving from reactive to proactive

The Fed maintained the federal funds target range at 0.00-0.25 per cent. The statement noted that it will soon be appropriate for the Fed to raise rate
27 January 2022
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    Key takeaways:

    • At the January meeting, the Federal Reserve (Fed) maintained the federal funds target range at 0.00-0.25 per cent
    • The statement noted that it will soon be appropriate for the Fed to raise the policy rate
    • The FOMC is discussing how and when to run down the balance sheet. Chair Powell suggested it will happen earlier and more quickly than in the previous cycle
    • With the economy in an expansion phase and the Fed on the cusp of starting to remove policy accommodation yields have the potential to rise further
    • The potential for higher yields means we are also selective in our exposure to risk assets