The Federal Reserve Bank new plan (Central Bank of America) has recently announced some new policies and plans. The main points are explained here:
there will be no change in interest rates
The “Federal Reserve Bank” has maintained the Federal Funds Rate at 4.25%-4.50%.
The pace of balance sheet reduction will be slowed down:
- Reduced sales of Treasury securities to $5 billion/month (previously $25 billion).
- Agency MBS (housing loan linked bonds) sales will be restricted to $35 billion/month.
Federal has set its 5 main goals for 2024-2027
- Monetary Policy: To increase employment, control inflation.
- Banking regulation: strengthening banks, tackling fintech and cyber threats.
- Modernization of payment system: focus on real-time payments and digital currency security.
Federal Reserve Bank interest rate cut in 2025
According to Fed estimates, there could be a cut in interest rates by 0.50% by the end of 2025, bringing the rate to 3.25%-3.50%.
However, Fed Chair Jerome Powell has called for caution because inflation is not yet fully controlled.
International Monetary Policy Cooperation
The New York Fed will hold a seminar for global central bankers in 2025 to discuss monetary policy and financial regulation.
Financial policy review in 2025
The Fed will review the “flexible average inflation targeting” policy it implemented in 2020, as some critics say it has been slow to control inflation.
For more information you can visit the Official Website of the Federal Reserve.
