Attention Economy


Tuesday, November 30, 2021

A Global Tail Risk

Arkansas - The Next Hot Spot?

A Fed Shift?

Jerome Powell pivots, suggesting quicker reduction in economic help as high inflation persists.
https://www.nytimes.com/2021/11/30/business/powell-bond-buying-taper.html

Markets Race to Process Latest ‘Powell Pivot’

A Top Official Says the Fed Will ‘Grapple’ With a Faster Bond-Buying Taper
https://www.nytimes.com/2021/12/01/business/fed-inflation-omicron-covid.html

Powell Weighs Earlier End to Bond Tapering Amid Hot Inflation

Jerome Powell:
https://www.federalreserve.gov/newsevents/testimony/powell20211130a.htm
Most forecasters, including at the Fed, continue to expect that inflation will move down significantly over the next year as supply and demand imbalances abate. It is difficult to predict the persistence and effects of supply constraints, but it now appears that factors pushing inflation upward will linger well into next year. In addition, with the rapid improvement in the labor market, slack is diminishing, and wages are rising at a brisk pace.

US Corporate Profits Soar

Indian Economy - Short-Term Developments and Long-Term Trends

India's GDP expands 8.4% in July-Sept. as COVID recedes
https://asia.nikkei.com/Economy/India-s-GDP-expands-8.4-in-July-Sept.-as-COVID-recedes
 
India’s Spending Helps Fuel Growth as Risks from New Variant Loom
https://www.bloomberg.com/news/articles/2021-11-29/spending-helps-fuel-india-s-growth-as-risks-from-new-strain-loom
 
Long Term Trends:
India’s Next Decade: Some Predictions, Some Speculations
https://csep.org/working-paper/indias-next-decade-some-predictions-some-speculations/
A third-generation strategy for accelerated growth and development in India
https://csep.org/working-paper/a-third-generation-strategy-for-accelerated-growth-and-development-in-india/ 

Sunday, November 28, 2021

America's Infrastructure Problems

Years of Delays, Billions in Overruns: The Dismal History of Big Infrastructure
https://www.nytimes.com/2021/11/28/us/infrastructure-megaprojects.html 

Why does it cost so much more to build transportation networks in the US than in the rest of the world?
https://www.vox.com/22534714/rail-roads-infrastructure-costs-america

Why it costs more to build and maintain US infrastructure

The grid’s big looming problem: Getting power to where it’s needed
https://www.washingtonpost.com/business/2021/06/29/power-grid-problems/ 

Destressing in South Korea

In stressed-out South Korea, people are paying to stare at clouds and trees
https://www.washingtonpost.com/world/2021/11/25/korea-stress-relax-pandemic/ 

Thursday, November 25, 2021

Trust, Society, and Political Polarization

Why Has Chile Embraced the Extremes?
https://www.project-syndicate.org/commentary/chile-presidential-election-political-extremes-by-andres-velasco-2021-12
 
Can the Center Hold Any Meaning?
https://www.project-syndicate.org/commentary/political-centrism-by-jan-werner-mueller-2021-11
During the twentieth-century “age of ideological extremes,” political centrism had an obvious role to play in preserving democracy. But once democracy itself is in jeopardy, as it is in countries like the United States today, centrism becomes meaningless – or even dangerous.

Is society coming apart?
A warning from Harvard Historian Jill Lepore:
https://www.theguardian.com/society/2021/nov/25/society-thatcher-reagan-covid-pandemic
In many parts of the world, totalitarianism remains a danger, not from the state but from corporations that control data, knowledge and information. There is no escape. They know everything about you. You can hardly engage in a transaction – political, financial, cultural or social – without them. It’s less that the social fabric has grown frayed, its edges unravelling, than that the so-called social fabric is now manufactured, for profit, by monopolistic businesses, a cheap, throwaway fake.
Before the pandemic, there was a real world, and this fake one, real friendships and “friends”, political communities and “followers”, genuine political expression and “likes”. The risk, when interactions with other human beings are narrowed to these remote, glancing and often combative exchanges – simulations – is that, once the lockdowns are over, people will bring the culture of the virtual into the real, creating even angrier, more impatient, more superficial, more transactional, more commercial and less democratic societies. 

The End of Trust: Suspicion is undermining the American economy.
https://www.theatlantic.com/magazine/archive/2021/12/trust-recession-economy/620522/

Why Denmark Is More Resilient Than Germany and the U.S. in the Covid Age
https://www.bloomberg.com/opinion/articles/2021-11-20/denmark-is-more-resilient-than-the-u-s-and-germany-because-of-trust
The vital ingredient appears to be the level of trust in a society. But once it’s gone, can you get it back?
 
Denmark’s Hard Lessons About Trust and the Pandemic
https://www.nytimes.com/2021/11/14/opinion/denmark-trust-covid-vaccine.html
 
Related:
A new key to covid success: Not states but societies
https://www.washingtonpost.com/opinions/global-opinions/a-new-key-to-covid-success-not-states-but-societies/2021/04/08/31142d74-98a7-11eb-a6d0-13d207aadb78_story.html 

Lifelong Quest for Knowledge

He always wanted to be a physicist. At 89, he earned his doctorate from Brown.
https://www.washingtonpost.com/education/2021/11/25/retired-doctor-earns-physics-doctorate-age-89/ 

Too Much Money Chasing Too Few Assets

Wednesday, November 24, 2021

The EV Bubble


Electric vehicles are not the greenhouse silver bullet many think
https://asia.nikkei.com/Opinion/Electric-vehicles-are-not-the-greenhouse-silver-bullet-many-think

A Flawed Business School Ranking

The problem with Bloomberg Businessweek’s ranking of business schools
https://www.chronicle.com/article/a-dean-tried-to-replicate-a-popular-college-ranking-he-couldnt

US Tariffs on China - Economics versus Politics

Macro Policy and US Inflation Dynamics


The Fed Has More Options Than 0% Rates or Recession
https://www.bloomberg.com/opinion/articles/2021-11-17/the-fed-has-more-options-than-0-rates-or-recession
Brian Chappatta notes:
If the specter of gradually raising interest rates from near zero is enough to cause a market panic, perhaps the Fed should take that as a sign that the financialization of the American economy has gone too far. During the last tightening cycle, equities plunged in late 2018 before the central bank could even fully reach its 2.5% neutral rate, forcing a hard pivot to rate cuts. It’s possible that after the recent sharp run-up in risk assets, investor sentiment would sour even sooner. If the Fed means what it says and wants to conduct monetary policy away from the zero lower bound, leaving stocks and credit markets hooked on stimulus isn’t the way to do it. 

Related:

My take:

India's Airline Industry

Tuesday, November 23, 2021

Monday, November 22, 2021

Emerging Markets - Inflation and Exchange Rates

Jerome Powell – The Safe Pick

Biden taps Jerome Powell for second term as Fed chair, signaling continuity at central bank
https://www.washingtonpost.com/us-policy/2021/11/22/powell-fed-chair-brainard-biden/

American Politics - Both the Left and the Right Suck

Progressive donors to the left of him, cynical centrists to the right — a theory of why his popular agenda is so unpopular.
https://nymag.com/intelligencer/2021/11/joe-biden-agenda.html
 
Why Democrats are so bad at politics
https://www.ft.com/content/5a7b2081-7049-4942-bdee-96499c3dab3b 

India's Economy - Urban versus Rural

Venture capital funds pile into India's startup scene
https://asia.nikkei.com/Spotlight/Market-Spotlight/Venture-capital-funds-pile-into-India-s-startup-scene
 
Agricultural Reforms and Growth in India
https://www.bloomberg.com/opinion/articles/2021-11-21/modi-s-farm-misadventure-will-hurt-urbanization-and-agriculture-reform
Agriculture in the second-most-populous nation suffers from many infirmities: Unlike the Japanese rulers of Taiwan in the first half of the 20th century, Britain’s colonial government in India didn’t give tenants secure rights, dooming post-independence land reforms. Holdings are fragmented and uneconomical; crop diversification beyond rice and wheat is poor; subsidies abound but public investment is paltry. 

Sunday, November 21, 2021

The Battle for Congo's Cobalt

Hunt for the ‘Blood Diamond of Batteries’ Impedes Green Energy Push
https://www.nytimes.com/2021/11/29/world/congo-cobalt-albert-yuma-mulimbi.html
Americans failed to safeguard decades of diplomatic and financial investments in Congo, where the world’s largest supply of cobalt is controlled by Chinese companies backed by Beijing.



Saturday, November 20, 2021

Polarization and Political Instability

How the ‘Culture War’ Could Break Democracy
https://www.politico.com/news/magazine/2021/05/20/culture-war-politics-2021-democracy-analysis-489900
“Democracy, in my view, is an agreement that we will not kill each other over our differences, but instead we’ll talk through those differences. And part of what’s troubling is that I’m beginning to see signs of the justification for violence,” says Hunter, noting the insurrection on January 6, when a mob of extremist supporters of Donald Trump stormed the U.S. Capitol in an attempt to overthrow the results of the 2020 election. “Culture wars always precede shooting wars. They don’t necessarily lead to a shooting war, but you never have a shooting war without a culture war prior to it, because culture provides the justifications for violence.”
 
Daniel Patrick Moynihan Was Often Right. Joe Klein on Why It Still Matters.
https://www.nytimes.com/2021/05/15/books/review/daniel-patrick-moynihan-was-often-right-joe-klein-on-why-it-still-matters.html
“The central conservative truth is that it is culture, not politics, that determines the success of a society,” Senator Daniel Patrick Moynihan of New York said during a lecture at Harvard in 1986. “The central liberal truth is that politics can change a culture and save it from itself.” 

Chile’s Political Future

Update: Right-Wing Resurgence in Chile Vote Fuels World-Beating Rally

India, Vietnam and the Indo-Pacific

Thursday, November 18, 2021

Get Rid of Legacy Admissions

Amherst College dropped legacy admissions. Other schools need to follow its lead
https://www.washingtonpost.com/opinions/2021/11/17/amherst-college-legacy-admissions-more-schools-follow/
 
Legacy and Athlete Preferences at Harvard
https://www.journals.uchicago.edu/doi/abs/10.1086/713744
We use public documents from the Students for Fair Admissions v. Harvard University lawsuit to examine admissions preferences for recruited athletes, legacies, those on the dean’s interest list, and children of faculty and staff (ALDCs). More than 43% of white admits are ALDC; the share for African American, Asian American, and Hispanics is less than 16%. Our model of admissions shows that roughly three-quarters of white ALDC admits would have been rejected absent their ALDC status. Removing preferences for athletes and legacies would significantly alter the racial distribution of admitted students away from whites.
 
What would merit based admissions look like in the real world?
CALTECH – MERIT BASED ADMISSION – PROFILE OF STUDENTS:
https://registrar.caltech.edu/records/enrollment-statistics 

Wednesday, November 17, 2021

Wall Street Pay - Junior Bankers Start at Six Figures

Crushed by pandemic workloads, Wall Street’s youngest want more money and better conditions. But mostly more money.
https://nymag.com/intelligencer/2021/11/goldman-sachs-analysts-money-pandemic.html 

Healthcare Workers Are Quitting in Droves

Hong Kong Loses its Luster

US Labor Market is Tight

The government dramatically underestimated job growth this summer
https://www.washingtonpost.com/business/2021/11/16/government-underestimated-job-growth/

A Record 4.4 Million Americans Quit Their Jobs in September

In a ‘Workers Economy,’ Who Really Holds the Cards?
https://www.nytimes.com/2021/11/03/business/jobs-workers-economy.html 

Why millions of job seekers aren’t getting hired in this hot job market
https://www.washingtonpost.com/business/2021/11/08/job-search-not-getting-hired/
The United States has a record number of job openings, but many firms continue to favor candidates with several years of experience, availability to work evening or weekend hours, and a willingness to work in-person 

Tuesday, November 16, 2021

Risk versus Uncertainty

Rise and Fall of Ethiopia

Once the great hope of Africa, Ethiopia is descending into chaos before our eyes
https://www.telegraph.co.uk/global-health/terror-and-security/great-hope-africa-ethiopia-descending-chaos-eyes/ 

Macro Policy Errors and the 2021 Inflation Shock

MY TAKE: How did the Fed get it so wrong on inflation?
https://thehill.com/opinion/finance/581582-how-did-the-fed-get-it-so-wrong-on-inflation
 
On inflation, it’s past time for team ‘transitory’ to stand down by Larry Summers
https://www.washingtonpost.com/opinions/2021/11/15/inflation-its-past-time-team-transitory-stand-down/
 
How America’s Pandemic Economic Response Fought the Last War by Neil Irwin
https://www.nytimes.com/2021/11/15/upshot/pandemic-economic-response.html

US Consumer Demand Remains Strong:
U.S. Retail Sales Jump by Most Since March, Topping Forecasts
https://www.bloomberg.com/news/articles/2021-11-16/u-s-retail-sales-jump-by-most-since-march-topping-forecasts 

Monday, November 15, 2021

An Embassy in the Metaverse

Barbados to Become First Sovereign Nation With an Embassy in the Metaverse
https://www.coindesk.com/business/2021/11/15/barbados-to-become-first-sovereign-nation-with-an-embassy-in-the-metaverse/
 
HT: Aquille Trotman

Engineering Breakthroughs


Can the world's whitest paint save Earth? 

Rich World Hypocrisy Regarding Climate Action

China's Ongoing Property Crisis

Monopoly, Monopsony, and the Future of US Capitalism

Monopoly’s Bad Cousin
https://www.nytimes.com/2021/11/15/opinion/antitrust-penguin-biden.html
“In fact, monopsonies are bad for consumers, too. Monopoly and monopsony are different forms of market power, but both let corporations sell less stuff without making less money”. 




Related:
To make capitalism more attractive, policymakers must emphasize pro-market (not pro-business) policies
https://thehill.com/opinion/finance/513956-to-make-capitalism-more-attractive-policymakers-must-emphasize-pro-market-not

Killing the Competition
https://harpers.org/archive/2012/02/killing-the-competition/
How the new monopolies are destroying open markets

Sunday, November 14, 2021

Africa’s Infrastructure Needs – BRI versus B3W

Room in Africa for both China’s belt and road plan and Biden’s B3W
https://www.scmp.com/news/china/diplomacy/article/3155857/room-africa-both-chinas-belt-and-road-plan-and-bidens-b3w
 
COOL GRAPHICS: How China is looking beyond borders
https://multimedia.scmp.com/news/china/article/3007692/belt-and-road/ 

Will There be Another Winter Covid Surge?

Covid cases are surging in Europe. America is in denial about what lies in store for it
https://www.theguardian.com/commentisfree/2021/nov/12/covid-cases-surging-europe-america-denial 

Downside of Market Consolidation

The last drugstore: Rural America is losing its pharmacies
https://www.washingtonpost.com/business/2021/11/10/drugstore-shortage-rural-america/
Over 40 million rural Americans live in pharmacy deserts because of market consolidation 

Social Trust and Public Policy Effectiveness

Denmark’s Hard Lessons About Trust and the Pandemic
https://www.nytimes.com/2021/11/14/opinion/denmark-trust-covid-vaccine.html


The Pandemic Proves Only Technocrats Can Save Us
https://foreignpolicy.com/2021/06/24/pandemic-technocrats-global-challenges/#
Populist politicians love to belittle experts, but when it’s a matter of life and death, the precautionary principle and expertise are what counts. 

Related:

The Latest Crisis in Europe

A Dictator Is Exploiting These Human Beings
https://www.theatlantic.com/ideas/archive/2021/11/belarus-eu-poland-migrants-refugees-border/620700/
 
Threats and troop movements ramp up a European stalemate with Cold War echoes
https://www.nytimes.com/2021/11/12/world/europe/threats-troop-buildup-war.html 

Challenges Facing US Higher Education


In-House B-Schools Give Firms MBAs With the Skills They Want
https://www.bloomberg.com/news/articles/2021-11-10/business-schools-employers-create-own-mba-programs-to-get-workforce-they-want
The proliferation of company-run programs shows universities aren’t keeping up with corporate needs. 
 
Can Universities Defy the New Nationalism?
https://www.project-syndicate.org/commentary/us-damaging-restrictions-on-international-academic-collaboration-by-emily-j-levine-2021-11

Do America really need more lawyers?
The country’s most popular law school got an unexpected jolt
https://www.washingtonpost.com/education/2021/11/13/most-popular-law-school-georgetown/ 

Weekend Readings – Economics and Politics

Saturday, November 13, 2021

Consumerism and the American Economy

Americans Need to Learn to Live More Like Europeans
https://www.bloomberg.com/opinion/articles/2021-11-12/personal-finance-americans-need-to-live-more-like-europeans
Supply-chain shortages are constraining U.S. consumers' endless appetite for buying whatever they want whenever they want. It's about time. 

Societal Impact of New Technologies

Artificially intelligent advertising technology is poisoning our societies.
https://www.theatlantic.com/magazine/archive/2021/12/ai-ad-technology-singularity/620521/

Thursday, November 11, 2021

The US Inflation Story - 2021 Edition

Inflation emerges as defining economic challenge of Biden presidency, with no obvious solution at hand
https://www.washingtonpost.com/us-policy/2021/11/14/inflation-economy-biden-prices/

It's Official. The Inflation Numbers Are a Hot Sticky Mess
https://www.bloomberg.com/opinion/articles/2021-11-11/it-s-official-the-inflation-numbers-are-a-hot-sticky-mess
 
Inflation in the economy today is different. Here are four charts that can explain why.
https://www.washingtonpost.com/business/2021/10/14/inflation-prices-supply-chain/

Fastest Inflation in 31 Years Puts More Heat on Washington
https://www.nytimes.com/2021/11/10/business/economy/consumer-price-inflation-october.html
 
Democrats ignore the recent inflation numbers at their peril
https://www.washingtonpost.com/opinions/2021/11/11/inflation-wages-economy-democrats/

The White House Says Its Plans Will Slow Inflation. The Big Question Is: When?
https://www.nytimes.com/2021/11/11/business/economy/biden-inflation.html

MY TAKE: A still-dovish Fed raises the risk of stagflation lite
https://thehill.com/opinion/finance/580712-a-still-dovish-fed-raises-the-risk-of-stagflation-lite

Wednesday, November 10, 2021

Patents and Drug Discovery - The Role of Public Funding

Moderna took NIH money and help for its covid vaccine. Now it wants to leave government scientists off a lucrative patent.
https://www.washingtonpost.com/business/2021/11/09/moderna-nih-patent-vaccine/
The company, which has received public subsidies for its vaccine, acknowledges NIH contributions but says it alone invented the shot. 

America's Broken Patent System

Global Inflation Surge

MY TAKE: A still-dovish Fed raises the risk of stagflation lite
https://thehill.com/opinion/finance/580712-a-still-dovish-fed-raises-the-risk-of-stagflation-lite

Prices climbed 6.2 percent in October compared to last year, the largest increase in 30 years, as inflation strains economy
https://www.washingtonpost.com/business/2021/11/10/cpi-inflation-october/

Inflation spiked in October, scuppering Washington’s hopes that price gains would slow down.
https://www.nytimes.com/2021/11/10/business/economy/consumer-price-inflation-october.html
 
Inflation Builds with Biggest Gain in Consumer Prices Since 1990
https://www.bloomberg.com/news/articles/2021-11-10/inflation-builds-with-biggest-gain-in-consumer-prices-since-1990
 


Chip Wars - Apple versus Intel

Politics of Central Banking


My take:

Tuesday, November 9, 2021

Is the ‘Dating Market’ Getting Worse?

Stagflation – Then and Now

My new piece: A still-dovish Fed raises the risk of stagflation lite
https://thehill.com/opinion/finance/580712-a-still-dovish-fed-raises-the-risk-of-stagflation-lite
 
Stagflation in the 1970s and the Volcker Disinflation Episode
https://www.federalreservehistory.org/essays/anti-inflation-measures

How the Fed Distorts Financial Markets

One Trader Calls All the Shots in the Treasury Bond Market
https://www.bloomberg.com/news/articles/2021-11-02/stock-market-jerome-powell-federal-reserve-dominate-treasury-bond-trades
 The Fed is so dominant that “vigilantes” have lost their power as a check on government excess.

Wall Street Benefits from Fed Largesse
What Bank Earnings from JPMorgan, Bank of America Tell Us About the U.S. Economy
https://www.wsj.com/articles/what-bank-earnings-tell-us-about-the-economy-11634236512
Wall Street is booming, or at least parts of it are. Merger mania and stock trading lifted the big U.S. banks’ third-quarter results. On Main Street, banks are still hunting for bigger loan growth, but many customers are spending more after holding out last year.
 
Wall Street Bosses See Windfall Lasting, Fueling Pay and Hiring
https://www.bloomberg.com/news/articles/2021-10-14/wall-street-bosses-see-windfall-lasting-fueling-pay-and-hiring
The dealmaking and trading windfall that the pandemic unleashed on Wall Street firms just keeps piling up as the economy recovers -- and U.S. banking leaders are pointing to signs that it’s far from over.

Low Interest Rates - End of an Era

Emerging Markets - Recent Developments

Monday, November 8, 2021

Economic Challenges Facing Germany

Germany’s Economy, Once Europe’s Engine, Is Holding It Back
https://www.wsj.com/articles/germany-economy-lagging-behind-europe-supply-chain-11636383954

Fresh Winners in the Era of Chip Shortages

Chip Shortage Creates New Power Players
https://www.nytimes.com/2021/11/08/technology/computer-chip-shortage.html
Low-profile chip makers with aging factories have become surprisingly powerful, leading to industry changes that may outlive the pandemic-fueled supply crunch. 

The Pandemic Has Been Good for Billionaires

Led By Elon Musk’s Crazy Gains, American Billionaires Have Added Nearly $2 Trillion To Their Fortunes During the Pandemic
https://www.forbes.com/sites/chasewithorn/2021/11/07/led-by-elon-musks-crazy-gains-american-billionaires-have-added-trillions-to-their-fortunes-during-the-pandemic/ 

Rising Risk of a Military Conflict between India and China

Related:

Saturday, November 6, 2021

Why Americans Are So Grumpy

Americans Are Flush with Cash and Jobs. They Also Think the Economy Is Awful.
https://www.nytimes.com/2021/11/06/upshot/inflation-psychology-economy.html

Trapped in a Pandemic Funk: Millions of Americans Can’t Shake a Gloomy Outlook
https://www.nytimes.com/2021/11/05/us/pandemic-funk-america.html
Despite signals that the economy is improving and the virus is waning, many Americans said they were frustrated by polarized politics and a sense of stagnancy.
 
Why Americans Are So Grumpy About Their Economic Boom
https://www.bloomberg.com/opinion/articles/2021-11-05/u-s-economic-boom-isn-t-making-americans-happy 

Thursday, November 4, 2021

$25 Minimum Wage

Moderates and US Politics

A Moderate Proposal
With both parties captured by their extremes, a bipartisan bloc could set the Senate’s agenda—and even save democracy.
https://www.theatlantic.com/ideas/archive/2021/11/how-moderates-could-actually-take-control-washington/620599/ 

Is California Run by Morons?

Proposed guidelines in the state would de-emphasize calculus, reject the idea that some children are naturally gifted and build a connection to social justice. Critics say math shouldn’t be political.
https://www.nytimes.com/2021/11/04/us/california-math-curriculum-guidelines.html 

Monetary Policy and the Natural Rate of Unemployment

Elon Musk's Sci-Fi Dreams

Fascinating piece by Harvard historian Jill Lepore:
Elon Musk Is Building a Sci-Fi World, and the Rest of Us Are Trapped in It
https://www.nytimes.com/2021/11/04/opinion/elon-musk-capitalism.html 

Wednesday, November 3, 2021

The Extraordinary Life of John von Neumann

The Man from the Future: The Visionary Life of John von Neumann by Ananyo Bhattacharya
Review:
https://www.theguardian.com/books/2021/oct/13/the-man-from-the-future-by-ananyo-bhattacharya-review-the-life-of-john-von-neumann 

Fed Shifts from Ultra-Dovish to Dovish

What Jerome Powell Didn’t Do: Lay the Groundwork for Higher Rates
https://www.nytimes.com/2021/11/03/upshot/powell-fed-rates-inflation.html

Stocks Hit Record, Bond Curve Steepens After Fed: Markets Wrap
https://www.bloomberg.com/news/articles/2021-11-02/asian-stocks-set-for-mixed-start-as-fed-awaited-markets-wrap

Fed Sets a Date with Bond Vigilantes in Eight Months
https://www.bloomberg.com/opinion/articles/2021-11-03/fed-decision-central-bank-sets-date-with-bond-vigilantes-in-8-months
 
HIGHLIGHTS FROM THE FOMC STATEMENT [NOV 3, 2021]:
https://www.federalreserve.gov/newsevents/pressreleases/monetary20211103a.htm
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 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.