FOMC Statement

For release at 10 a.m. EST

March 3, 2020

The fundamentals of the U.S. economy remain strong. However, the coronavirus poses

evolving risks to economic activity. In light of these risks and in support of achieving its

maximum employment and price stability goals, the Federal Open Market Committee decided

today to lower the target range for the federal funds rate by 1/2 percentage point, to 1 to

1-1/4 percent. The Committee is closely monitoring developments and their implications for the

economic outlook and will use its tools and act as appropriate to support the economy.

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; Loretta J. Mester; and Randal K. Quarles.

-0-

For media inquiries, call 202-452-2955.

For release at 10 a.m. EST

March 3, 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 3, 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 1.10 percent, effective March

4, 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 4, 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 1 to 1-1/4 percent. In light of recent and expected

increases in the Federal Reserve's non-reserve liabilities, the Committee directs

the Desk to continue purchasing Treasury bills at least into the second quarter of

2020 to maintain over time ample reserve balances at or above the level that

prevailed in early September 2019. The Committee also directs the Desk to

continue conducting term and overnight repurchase agreement operations at least

through April 2020 to ensure that the supply of reserves remains ample even

during periods of sharp increases in non-reserve liabilities, and to mitigate the risk

of money market pressures that could adversely affect policy implementation. 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 1.00 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 per-counterparty 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

continue reinvesting all principal payments from the Federal Reserve's holdings

of agency debt and agency mortgage-backed securities received during each

calendar month. Principal payments from agency debt and agency mortgagebacked securities up to $20 billion per month will continue to be reinvested in

Treasury securities to roughly match the maturity composition of Treasury

securities outstanding; principal payments in excess of $20 billion per month will

continue to be reinvested in agency mortgage-backed securities. Small deviations

from these amounts for operational reasons are acceptable.

(more)

For release at 10 a.m. EST

March 3, 2020

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 1/2 percentage point decrease in the primary credit rate to 1.75

percent, effective March 4, 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.

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.