DATE: January 31 - February 1, 2023

ECONOMIC HIGHLIGHTS: Economic activity continues to be viewed as modest, and inflation remains too high!

• Recent indicators point to modest growth in spending and production.
• Job gains have beenrobust in recent months, and the unemployment rate has remained low.
• Inflation has eased somewhat but remains elevated.
• Russia's war against Ukraine is causing tremendous human and economic hardship. As well as, contributing to elevated global uncertainty.
• The Committee is highly attentive to inflation risks.

ANNOUNCEMENTS: Fed funds rate increased. Fed funds range raised by a 0.25% to a new range of 4.50% to 4.75%, and balance sheet reductions continue.

• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run.
• In support of these goals, the Committee decided to raise the target range for the federal funds rate to 4.50% - 4.75%.
• The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time.
• In determining the extent of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.
• In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans.

POLICY IMPLEMENTATION STATEMENT

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 February 1, 2023:

• The Board of Governors of the Federal Reserve System voted unanimously to raise the interest rate paid on reserve balances to 4.65%, effective February 2, 2023.

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 February 2, 2023, 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 4.50% to 4.75%. Conduct overnight repurchase agreement operations with a minimum bid rate of 4.75% and with an aggregate operation limit of $500 billion; the aggregate operation limit can be temporarily increased at the discretion of the Chair.
• Conduct overnight reverse repurchase agreement operations at an offering rate of 4.55% 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.
• Roll over at auction the amount of principal payments from the Federal Reserve's holdings of Treasury securities maturing in each calendar month that exceeds a cap of $60 billion per month. Redeem Treasury coupon securities up to this monthly cap and Treasury bills to the extent that coupon principal payments are less than the monthly cap.
• Reinvest into agency mortgage-backed securities (MBS) the amount of principal payments from the Federal Reserve's holdings of agency debt and agency MBS received in each calendar month that exceeds a cap of $35 billion per month.
• Allow modest deviations from stated amounts for reinvestments, if needed for operational reasons.
• 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 a 0.25% point increase in the primary credit rate to 4.75%, effective February 2, 2023. In taking this action, the Board approved requests to establish that rate submitted by the Boards of Directors of the Federal Reserve Banks of Boston, New York, Philadelphia, Richmond, Atlanta, Chicago, Kansas City, Dallas, and San Francisco.

VOTING RESULTS: No dissenting votes

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Lael Brainard; Lisa D. Cook; Austan D.
Goolsbee; Patrick Harker; Philip N. Jefferson; Neel Kashkari; Lorie K. Logan; and Christopher J. Waller.

NEXT MEETING: March 21 - 22, 2023