Fed Announcement and Virus Update
This afternoon, the Fed held the overnight target steady at 1.50% to 1.75% while making a technical adjustment within the band by raising the interest (paid) on excess reserves (IOER) from 1.55% to 1.60%. They also indicated they will be extending repo operations and purchasing Treasury bills until at least April. The committee characterized the pace of household spending as “moderate,” instead of “strong” as they indicated in December. This is important to watch going forward as the consumer carried economic growth on its back for much of last year.