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For release at 5 p.m. EDT

March 15, 2020

The coronavirus outbreak has harmed communities and disrupted economic activity in
many countries, including the United States. Global financial conditions have also been
significantly affected. Available economic data show that the U.S. economy came into this
challenging period on a strong footing. Information received since the Federal Open Market
Committee met in January indicates that the labor market remained strong through February and
economic activity rose at a moderate rate. Job gains have been solid, on average, in recent
months, and the unemployment rate has remained low. Although household spending rose at a
moderate pace, business fixed investment and exports remained weak. More recently, the energy
sector has come under stress. On a 12‑month basis, overall inflation and inflation for items other
than food and energy are running below 2 percent. Market-based measures of inflation
compensation have declined; survey-based measures of longer-term inflation expectations are
little changed.
Consistent with its statutory mandate, the Committee seeks to foster maximum
employment and price stability. The effects of the coronavirus will weigh on economic activity
in the near term and pose risks to the economic outlook. In light of these developments, the
Committee decided to lower the target range for the federal funds rate to 0 to 1/4 percent. The
Committee expects to maintain this target range until it is confident that the economy has
weathered recent events and is on track to achieve its maximum employment and price stability
goals. This action will help support economic activity, strong labor market conditions, and
inflation returning to the Committee’s symmetric 2 percent objective.
The Committee will continue to monitor the implications of incoming information for the
economic outlook, including information related to public health, as well as global developments
and muted inflation pressures, and will use its tools and act as appropriate to support the
economy. In determining the timing and size of future adjustments to the stance of monetary
policy, the Committee will assess realized and expected economic conditions relative to its
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March 15, 2020
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maximum employment objective and its symmetric 2 percent inflation objective. This
assessment will take into account a wide range of information, including measures of labor
market conditions, indicators of inflation pressures and inflation expectations, and readings on
financial and international developments.
The Federal Reserve is prepared to use its full range of tools to support the flow of credit
to households and businesses and thereby promote its maximum employment and price stability
goals. To support the smooth functioning of markets for Treasury securities and agency
mortgage-backed securities that are central to the flow of credit to households and businesses,
over coming months the Committee will increase its holdings of Treasury securities by at least
$500 billion and its holdings of agency mortgage-backed securities by at least $200 billion. The
Committee will also reinvest all principal payments from the Federal Reserve’s holdings of
agency debt and agency mortgage-backed securities in agency mortgage-backed securities. In
addition, the Open Market Desk has recently expanded its overnight and term repurchase
agreement operations. The Committee will continue to closely monitor market conditions and is
prepared to adjust its plans as appropriate.
Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams,
Vice Chair; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Patrick Harker; Robert S.
Kaplan; Neel Kashkari; and Randal K. Quarles. Voting against this action was Loretta J. Mester,
who was fully supportive of all of the actions taken to promote the smooth functioning of
markets and the flow of credit to households and businesses but preferred to reduce the target
range for the federal funds rate to 1/2 to 3/4 percent at this meeting.
In a related set of actions to support the credit needs of households and businesses, the
Federal Reserve announced measures related to the discount window, intraday credit, bank
capital and liquidity buffers, reserve requirements, and—in coordination with other central
banks—the U.S. dollar liquidity swap line arrangements. More information can be found on the
Federal Reserve Board’s website.

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For media inquiries, call 202-452-2955.

For release at 5 p.m. EDT

March 15, 2020

Decisions Regarding Monetary Policy Implementation
The Federal Reserve has made the following decisions to implement the monetary policy stance
announced by the Federal Open Market Committee in its statement on March 15, 2020:
•

The Board of Governors of the Federal Reserve System voted unanimously to set the
interest rate paid on required and excess reserve balances at 0.10 percent, effective March
16, 2020.

•

As part of its policy decision, the Federal Open Market Committee voted to authorize and
direct the Open Market Desk at the Federal Reserve Bank of New York, until instructed
otherwise, to execute transactions in the System Open Market Account in accordance with
the following domestic policy directive:
“Effective March 16, 2020, the Federal Open Market Committee directs the Desk to
undertake open market operations as necessary to maintain the federal funds rate in a
target range of 0 to 1/4 percent. The Committee directs the Desk to increase over coming
months the System Open Market Account holdings of Treasury securities and agency
mortgage-backed securities (MBS) by at least $500 billion and by at least $200 billion,
respectively. The Committee instructs the Desk to conduct these purchases at a pace
appropriate to support the smooth functioning of markets for Treasury securities and
agency MBS.
The Committee also directs the Desk to continue conducting term and overnight
repurchase agreement operations to ensure that the supply of reserves remains ample and
to support the smooth functioning of short-term U.S. dollar funding markets. In addition,
the Committee directs the Desk to conduct overnight reverse repurchase operations (and
reverse repurchase operations with maturities of more than one day when necessary to
accommodate weekend, holiday, or similar trading conventions) at an offering rate of
0.00 percent, in amounts limited only by the value of Treasury securities held outright in
the System Open Market Account that are available for such operations and by a percounterparty limit of $30 billion per day.
The Committee directs the Desk to continue rolling over at auction all principal payments
from the Federal Reserve’s holdings of Treasury securities and to reinvest all principal
payments from the Federal Reserve’s holdings of agency debt and agency mortgagebacked securities received during each calendar month in agency mortgage-backed
securities. Small deviations from these amounts for operational reasons are acceptable.
The Committee also directs the Desk to engage in dollar roll and coupon swap
transactions as necessary to facilitate settlement of the Federal Reserve’s agency
mortgage-backed securities transactions.

•

In a related action, the Board of Governors of the Federal Reserve System voted
unanimously to approve a 1-1/2 percentage point decrease in the primary credit rate to 0.25
percent, effective March 16, 2020. In taking this action, the Board approved requests to
establish that rate submitted by the Boards of Directors of the Federal Reserve Banks of
Minneapolis and New York.

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March 15, 2020

This information will be updated as appropriate to reflect decisions of the Federal Open Market
Committee or the Board of Governors regarding details of the Federal Reserve’s operational
tools and approach used to implement monetary policy.
More information regarding open market operations and reinvestments may be found on the
Federal Reserve Bank of New York’s website.


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102