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A full recap of the Fed's interest rate decision and Chair Jerome Powell's press conference

The Federal Reserve decided to hold rates steady and said the U.S. economy is recovering despite lingering Covid-19 concerns. Chair Jerome Powell said the U.S. economy is still a good deal away from making "substantial further progress" toward stable prices and maximum employment.

See below for a full recap of Powell's comments and live analysis.

Federal Reserve officials on Wednesday updated investors and economists on how they are thinking about inflation and employment in the United States. The central bank decided not to raise interest rates from near zero nor adjust the pace at which it buys government bonds each month.

Investors are paying close attention to how Chairman Jerome Powell characterizes the economic outlook given the spread of the delta variant of Covid-19 and its timeline for tapering its monthly bond purchases.

Powell said the U.S. economy is still a good deal away from making "substantial further progress" toward the Fed's dual mandates of stable prices and maximum employment.

"I'd say we have some ground to cover on the labor market side," Powell said Wednesday. "I think we're some way away from having had substantial further progress toward the maximum employment goal."

Powell concludes July 2021 press conference

Powell concluded the Federal open Market Committee's press conference at approximately 3:25 p.m. ET, speaking for just under one hour.

Thomas Franck

Fed won't cut mortgage-backed securities purchases alone, Powell says

The Fed is not considering cutting its purchases of mortgage-backed securities before its overall tightening process begins, Chair Jerome Powell said Wednesday.

Some analysts and economists have questioned why the Fed is buying billions of the mortgage-linked assets each month at a time when home prices have surged. Powell said that he didn't think the purchases of those assets had a significant impact on the housing market outside of the broader accommodative approach from the central bank.

"There is little support for idea of tapering [mortgage-backed securities] earlier than Treasurys," Powell said.

Powell did say that there was some support for tapering the mortgage-backed securities at a faster rate than Treasurys, once the process begins.

— Jesse Pound

Economist says Fed has 'started the tapering clock'

PNC Chief Economist Gus Faucher weighed in on Powell's remarks and the Fed's July monetary policy decision, saying the central bank has effectively begun the countdown to tapering.

"With its July 28 statement, the FOMC has started the tapering clock. The committee said that the economy has made progress toward its goals of full employment and inflation averaging 2% over the longer run, but not the 'substantial' further progress that it is looking for before it begins to reduce its purchases of long-term assets," he wrote. "The statement also said that the committee will continue to assess progress toward these goals at future meetings."

Jeff Cox

Stocks trade higher on Powell remarks, but reaction stays muted

VIDEO2:3702:37
'It may take some time' — Fed's Powell on labor market recovery

Stocks turned slightly higher after Fed Chairman Jerome Powell stressed that the U.S. economy has not made enough progress for the central bank to dial back aggressive support for the economy.

The S&P 500 erased earlier losses and edged up 0.2%. The tech-heavy Nasdaq Composite climbed 0.8% on the back of strong earnings from Alphabet and Microsoft. The Dow Jones Industrial Average last traded 40 points lower, but off its lowest level. Overall, the market action remained muted.

— Yun Li

Powell: Vaccines, industry adaptations reduce economic impact of successive Covid variants

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Fed's Powell explains why he expects smaller economic effect from delta variant

Powell explained that he expects that vaccine uptake and workplace adaptations are likely to reduce the economic effects of each successive wave of Covid-19.

His comments came as the highly infectious delta variant leads to a spike of Covid cases nationwide.

"What's happened is: First of all, people are vaccinated, they're going on with their lives. Secondly, we've kind-of learned to live with it. A lot of industries have kind-of improvised their way around it. Particularly, for example, buying a new home."

"It's seems like we've learned to handle this. We'd like to get back to the way things were, and I hope to some extent we will over time."

Thomas Franck

Powell describes economic impact of delta Covid variant

VIDEO2:0302:03
In our interest to make sure vaccinations happen globally: Powell

Federal Reserve Chair Jerome Powell said a rise in Covid cases due to the spread of the delta variant may not have a significant impact on the economic recovery.

"With successive waves of Covid over the past year and some months now, there has tended to be...less in the way of economic implications from each wave, and we will see whether that is the case with the Delta variety," Powell said.

"It's certainly not an unreasonable expectation," he added.

However the central bank chief emphasized the continued risk that Covid poses.

"As long as Covid is running loose out there, as long as there is time and space for the development of new strains, no one's really finally safe. These strains, there's no reason they just can't keep coming...one more powerful than the next," Powell said.

Powell emphasized the importance of vaccination in combatting the virus.

Hannah Miao

Powell says inflation expected to stay above 2% in the months ahead

Powell said in his press conference that he expects inflation to remain above the central bank's target level in the months ahead, but that it isn't enough to cause the Fed to change its policy stance so far.

"Inflation is running well above our 2% objective, and has been for a few months, and is expected to run certainly above our objective for a few months before we believe it'll move back down toward our objective. The question of whether we've met that objective, formally, is really one for the committee to make," Powell said.

During the Covid pandemic, the Fed tweaked its target inflation to be an average of 2% and said it was willing to let inflation run hot for a period of time to make up for the below-target inflation in previous years.

— Jesse Pound

Powell says economy is 'some way away' from substantial further progress on employment

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'Strong jobs numbers': Powell on what's necessary to consider raising rates

Powell said the U.S. economy is still a good deal away from making "substantial further progress" toward the Fed's dual mandates of stable prices and maximum employment.

"What would substantial further progress be? I'd say we have some ground to cover on the labor market side. I think we're some way away from having had substantial further progress toward the maximum employment goal. I would want to see some strong job numbers."

Thomas Franck

Futures market shows investors increasingly see interest rate hike by late 2022

Following the Fed decision, odds increased for at least one hike by the central bank by the end of 2022.

Futures trading on the CME now indicate a 64% chance of one or more hikes in December 2022.

Thomas Franck

Fed announces two new repo facilities

Along with Wednesday's policy statement, the Federal Reserve announced the creation of two repurchasing agreement facilities to add stability money markets.

One facility will be a standing program aimed at U.S. market participants, while the other will be aimed at foreign participants and other central banks. Repo facilities let financial institutions park high quality assets, such as Treasury bonds, at the Fed in exchange for liquidity.

"These facilities will serve as backstops in money markets to support the effective implementation of monetary policy and smooth market functioning," the Fed said in a statement.

— Jesse Pound

Powell begins press conference

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Watch Federal Reserve Chair Jerome Powell's opening statement

Federal Reserve Chair Jerome Powell began speaking at a press conference following the Federal Open Market Committee two-day meeting.

Hannah Miao

Powell commentary on timeline for taper is key, economist says

"To me the main takeaway from an economic perspective is that they are still setting the stage for taper. They put a sentence in that gave some sense of timing — that the economy made some progress towards these goals," noted Michelle Meyer, chief U.S. economist at Bank of America. "It gave some sense that they are getting closer to when they want to signal the time line for tapering."

She said it will be interesting to see what Powell says about the timeline. "In May he said it was some time, in June he said it was a ways away. What will he use this time?"

— Patti Domm

July statement says economy has 'made progress' toward Fed's goals

The Fed's July 2021 statement says the U.S. economy has made progress toward the central bank's dual goals of inflation around 2% and low unemployment. Markets could see that as an early sign that the central bank may soon be thinking about adjustments to its easy-money policies.

Powell previously said that the Fed would maintain low rates and its monthly bond purchases until "substantial further progress" has been achieved.

Since December, "the economy has made progress toward these goals, and the Committee will continue to assess progress in coming meetings," the Fed said in its release.

Thomas Franck

Bond strategist says markets eager for Powell's presser

One bond strategist told CNBC that markets will likely hold off on a significant reaction until hearing from Powell.

"It's really going to com e down to 2:30," said Greg Faranello, the head of the U.S. rates group at AmeriVet Securities. He expects Powell to be asked about inflation and tapering. "It's a real tough one. I tend to think this meeting is going to come and go. He has the delta variant too. If he wants to lean on that, he has every opportunity to [so] here in the U.S. and globally."

Patti Domm

Fed holds rates and bond buying steady, says economic growth looks healthy

The Federal Reserve announced Wednesday afternoon that it held interest rates near zero and said the economy is rebounding despite lingering concerns over Covid-19.

As expected, the Federal Open Market Committee concluded its two-day meeting by keeping interest rates in a target range near zero.

Along with that, the committee reiterated its view that the economy continues to "strengthen."

"The sectors most adversely affected by the pandemic have shown improvement but have not fully recovered" the post-meeting statement said. "Inflation has risen, largely reflecting transitory factors. 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."

Thomas Franck, Jeff Cox

Federal Reserve seen holding interest rates near zero, Powell to make remarks

Federal Reserve officials will on Wednesday update investors and economists on how they are thinking about inflation and employment in the United States. The central bank is not expected to raise interest rates from near zero nor adjust the pace at which it buys government bonds each month.

Investors will likely pay close attention to how Chairman Jerome Powell characterizes the economic outlook given the spread of the delta variant of Covid-19 and its timeline for tapering its easy-money policies.

The Fed chief may address rising prices throughout the U.S. economy and whether he and other central bank officials believe the current inflation is sufficient to start discussing tighter monetary policy.

Since March of 2020, the Fed has bought $80 billion in Treasury securities and $40 billion in mortgage-backed securities each month in an effort to keep long-term interest rates low and prop up the U.S. economy.

Powell has said that officials will maintain those purchases until they have achieved "substantial further progress" toward their objectives of low unemployment and inflation at their 2% goal.

Thomas Franck