Supply and Demand Imbalances Related To

For release at 2 p.m.
EDT November 3, 2021
The Federal Reserve is committed to using its full range of tools to support the
U.S. economy in this challenging time, thereby promoting its maximum employment
and price stability goals.
With progress on vaccinations and strong policy support, indicators of economic

activity and employment have continued to strengthen. The sectors most adversely
affected by the pandemic have improved in recent months, but the summer’s rise in
COVID-19 cases has slowed their recovery. Inflation is elevated, largely reflecting
factors that are expected to be transitory. Supply and demand imbalances related to
the pandemic and the reopening of the economy have contributed to sizable price
increases in some sectors. Overall financial conditions remain accommodative, in
part reflecting policy measures to support the economy and the flow of credit to U.S.
households and businesses.
The path of the economy continues to depend on the course of the virus. Progress
on vaccinations and an easing of supply constraints are expected to support continued
gains in economic activity and employment as well as a reduction in inflation. Risks
to the economic outlook remain.
The Committee seeks to achieve maximum employment and inflation at the rate
of 2 percent over the longer run. With inflation having run persistently below this
longer-run goal, the Committee will aim to achieve inflation moderately above
2 percent for some time so that inflation averages 2 percent over time and longer‑term
inflation expectations remain well anchored at 2 percent. The Committee expects to
maintain an accommodative stance of monetary policy until these outcomes are
achieved. The Committee decided to keep the target range for the federal funds rate
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For release at 2 p.m. EDT November 3, 2021
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at 0 to 1/4 percent and expects it will be appropriate to maintain this target range until
labor market conditions have reached levels consistent with the Committee’s
assessments of maximum employment and inflation has risen to 2 percent and is on
track to moderately exceed 2 percent for some time. In light of the substantial further
progress the economy has made toward the Committee’s goals since last December,
the Committee decided to begin reducing the monthly pace of its net asset purchases
by $10 billion for Treasury securities and $5 billion for agency mortgage-backed
securities. Beginning later this month, the Committee will increase its holdings of
Treasury securities by at least $70 billion per month and of agency mortgage‑backed
securities by at least $35 billion per month. Beginning in December, the Committee
will increase its holdings of Treasury securities by at least $60 billion per month and
of agency mortgage-backed securities by at least $30 billion per month. The
Committee judges that similar reductions in the pace of net asset purchases will likely
be appropriate each month, but it is prepared to adjust the pace of purchases if
warranted by changes in the economic outlook. The Federal Reserve’s ongoing
purchases and holdings of securities will continue to foster smooth market
functioning and accommodative financial conditions, thereby supporting the flow of
credit to households and businesses.
In assessing the appropriate stance of monetary policy, the Committee will

continue to monitor the implications of incoming information for the economic
outlook. The Committee would be prepared to adjust the stance of monetary policy
as appropriate if risks emerge that could impede the attainment of the Committee’s
goals. The Committee’s assessments will take into account a wide range of
information, including readings on public health, labor market conditions, inflation
pressures and inflation expectations, and financial and international developments.
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Voting for the monetary policy action were Jerome H. Powell, Chair; John C.
Williams, Vice Chair; Thomas I. Barkin; Raphael W. Bostic; Michelle W. Bowman; Lael
Brainard; Richard H. Clarida; Mary C. Daly; Charles L. Evans; Randal K. Quarles; and
Christopher J. Waller.
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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
November 3, 2021:
• The Board of Governors of the Federal Reserve System voted unanimously to
maintain the interest rate paid on reserve balances at 0.15 percent, effective
November 4, 2021.
• 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 November 4, 2021, the Federal Open Market Committee directs the
Desk to:
o Undertake open market operations as necessary to maintain the
federal funds rate in a target range of 0 to 1/4 percent.
o Complete the increase in System Open Market Account (SOMA)
holdings of Treasury securities by $80 billion and of agency
mortgage-backed securities (MBS) by $40 billion, as indicated in the
monthly purchase plans released in mid-October.
o Increase the SOMA holdings of Treasury securities by $70 billion and
of agency MBS by $35 billion, during the monthly purchase period
beginning in mid-November.
o Increase the SOMA holdings of Treasury securities by $60 billion and
of agency MBS by $30 billion, during the monthly purchase period
beginning in mid-December.
o Increase holdings of Treasury securities and agency MBS by
additional amounts as needed to sustain smooth functioning of
markets for these securities.
o Conduct overnight repurchase agreement operations with a minimum
bid rate of 0.25 percent and with an aggregate operation limit of $500
billion; the aggregate operation limit can be temporarily increased at
the discretion of the Chair.
o Conduct overnight reverse repurchase agreement operations at an
offering rate of 0.05 percent and with a per-counterparty limit of $160
billion per day; the per-counterparty limit can be temporarily
increased at the discretion of the Chair.
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o Roll over at auction all principal payments from the Federal Reserve's
holdings of Treasury securities and reinvest all principal payments from
the Federal Reserve's holdings of agency debt and agency MBS in agency
MBS.
o Allow modest deviations from stated amounts for purchases and
reinvestments, if needed for operational reasons.
o Engage in dollar roll and coupon swap transactions as necessary to
facilitate settlement of the Federal Reserve's agency MBS transactions.”
• In a related action, the Board of Governors of the Federal Reserve System voted
unanimously to approve the establishment of the primary credit rate at the existing
level of 0.25 percent.
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.

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For release at 2 p.m.

EDT November 3, 2021

With progress on vaccinations and strong policy support, indicators of economic

In assessing the appropriate stance of monetary policy, the Committee will

Decisions Regarding Monetary Policy Implementation

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