FXStreet (Delhi) – Research Team at Nomura, notes that the Fed’s new target range for the federal funds rate is 25–50bp, with the interest rate for reserves going up to 50bp and the rate the Fed pays for overnight reverse repo transactions increasing to 25bp Key Quotes “The FOMC’s statement, and Federal Reserve Chair Yellen in the press conference following the decision, stressed three broad points about how the FOMC is likely to approach subsequent changes in interest rates. First, the Committee noted in several places that it expects the coming adjustment of interest rates to be “gradual.” Second, the FOMC statement stressed that the actual pace of adjustment will depend on how the economy evolves. Finally, the Committee said that “progress toward their objectives”—both realized and expected—would drive subsequent decisions to raise interest rates. The FOMC stressed that the actual path for inflation will be particularly important. Balance of risks: Overall, taking into account domestic and international developments, the Committee sees the risks to the outlook for both economic activity and the labor market as balanced. Criteria for raising rates: In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent inflation. In light of the current shortfall of inflation from 2 percent, the Committee will carefully monitor actual and expected progress toward its inflation goal. After liftoff (pace): The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data. Balance sheet policy: The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction, and it anticipates doing so until normalization of the level of the federal funds rate is well under way.” For more information, read our latest forex news.