Jerome Powell

Fed chair says it's unlikely there will be "troubling inflation" any time soon, and rates will stay low and asset purchases will continue at current levels. ICI reports another $3.24 billion of inflows as munis follow UST to lower yields.

While no FOMC action on monetary policy is expected, markets are watching for how the Federal Reserve partners with the Biden administration and how it reacts to the 10-year Treasury yield rising from 0.52% on Aug. 4 to 1.15% on Jan. 14.

The Federal Reserve has returned about $42 billion to the U.S. Treasury, and will soon transfer another $20 billion in excess funds connected to emergency lending facilities that stopped offering new loans last month.

Federal Reserve officials unanimously backed holding the pace of asset purchases steady when they met last month.

The Federal Reserve is in no hurry to taper its massive bond buying program, Chair Jerome Powell said Wednesday.

Federal Reserve Chair Jerome Powell is cautioning lawmakers that the U.S. economy remains in a damaged and uncertain state, despite progress made in the development of COVID-19 vaccines.

The central bank will prolong the life of the Commercial Paper Funding Facility and three other programs while returning congressionally approved funds for five separate facilities that will shut down Dec. 31.

The Federal Reserve said Friday it would comply with a Treasury Department request to return unused funds meant to backstop five emergency lending programs, moving to tamp down a public rift that arose a day earlier.

Analysts, issuers and lawmakers have mixed responses to the closure of the Municipal Liquidity Facility with some saying the move puts the municipal market in a precarious spot as COVID-19 continues to ravage the country.

While the facilities' availability inspired market confidence, the fact that $455 billion remains unused suggests shutting down the programs is unlikely to cause major problems, analysts say.