FOMC Press Conference: Key Takeaways

Below we present some key takeaways from the Fed Chairman’s press conference:

• Goods spending has moderated following large gains
• Consumer spending on services remains low
• Inflation remains below 2% target 
• Optimistic about the vaccine
• Progress on vaccine and mask wearing as positives
• Economy has proved more resilient than expected
• Monetary policy is playing a key role in supporting the recovery
• It's appropriate to leave rates at current levels until inflation on track to moderately exceed 2% for some time
• QE will continue until 'substantial further progress' made but  it's likely to this will take 'some time' 
• There are as many people unemployed now as at the peak of the financial crisis
• "The connection between low interest rates and asset values is probably something that's not as tight as people think"
• Fed won't react to small, transient inflation increases and its unlikely that anything  will result in sustained problematic inflation
• Fed is equipped with appropriate tools to deal with high inflation

The market reaction is moderate, the EURUSD currency pair fell slightly and US indices are also continuing to decline.