December 15–16 · Published January 6, 2021
Jerome H. Powell
December 15–16, 2020 FOMC Minutes
Our reading
The minutes are consistent with the statement because both documents affirm the Federal Reserve's commitment to using its full range of tools to support the economy, acknowledge the ongoing pandemic's adverse effects on economic activity, employment, and inflation, and detail the FOMC's decisions to maintain the federal funds rate at 0 to 1/4 percent and continue asset purchases of at least $80 billion in Treasury securities and $40 billion in agency mortgage-backed securities per month until substantial further progress is made toward maximum employment and price stability goals.
Our reading compares the minutes of the December 15–16 FOMC meeting with the FOMC statement issued at the end of that meeting, three weeks before the minutes were published.
Vote
- Michelle W. Bowman
- Lael Brainard
- Richard H. Clarida
- Patrick Harker
- Robert S. Kaplan
- Neel Kashkari
- Loretta J. Mester
- Jerome H. Powell
- Randal K. Quarles
- John C. Williams
From the minutes
FOMC minutes
Voting for this action: Jerome H. Powell, John C. Williams, Michelle W. Bowman, Lael Brainard, Richard H. Clarida, Patrick Harker, Robert S. Kaplan, Neel Kashkari, Loretta J. Mester, and Randal K. Quarles.
Voting against this action: None.
Consistent with the Committee's decision to leave the target range for the federal funds rate unchanged, the Board of Governors voted unanimously to leave the interest rates on required and excess reserve balances at 0.10 percent. The Board of Governors also voted unanimously to approve establishment of the primary credit rate at the existing level of 0.25 percent, effective December 17, 2020.
It was agreed that the next meeting of the Committee would be held on Tuesday–Wednesday, January 26–27, 2021. The meeting adjourned at 10:05 a.m. on December 16, 2020.
What changed from the previous meeting’s minutes
- Asset purchase guidance changed from "at least at the current pace" to explicit monthly minimums of $80 billion Treasuries and $40 billion MBS until substantial further progress.
- Seven participants in December SEP expected inflation above 2 percent in 2023, up from two in September.
- Participants shifted to viewing risks to economic activity as more balanced, citing positive vaccine news.
- A couple of participants noted permanent layoffs increased notably, a concern absent from November minutes.
- Participants discussed tapering purchases gradually after substantial progress, following the 2013-2014 sequence.
- Neel Kashkari replaced Mary Daly as a voting member; Daly had voted as alternate in November.
Summary generated automatically from the two documents.