Federal Reserve Now Targets Inflation Above 2%, Bitcoin Breaks $11K

Federal Reserve officials said Wednesday they would hold U.S. interest rates at close to zero and work to push inflation above 2% “for some time.”

  • Federal Open Market Committee keeps interest rates unchanged close to zero, according to its statement.
  • Panel agrees to maintain accommodative monetary policy until inflation climbs above 2% “for some time.”
  • The central bank will increase holdings of U.S. Treasury securities and mortgage-backed securities “at least at the current pace to sustain smooth market functioning and help foster accommodative financial conditions.”
  • Projection materials released with the statement show officials, on average, expect rates to remain close to zero through 2023.
  • On average, officials don’t expect 2% inflation until 2023.
  • Robert Kaplan, president of the Federal Reserve Bank of Dallas and a voting member of the panel, voted against the plan. He “prefers that the Committee retain greater policy rate flexibility.”
  • Neal Kashkari, president of the Federal Reserve Bank of Minneapolis, also cast a dissenting vote. He prefers that interest rates stay on hold “until core inflation has reached 2% on a sustained basis,” according to the statement.
  • Economists weren’t expecting Fed officials to make any changes to U.S. interest rates – which in March were cut close to zero on an emergency basis – as the…

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