FOMC Meeting September 15-16:Fed delivers on forward guidance, but defers on changes to QE

After announcing the changes to the Longer-Run Goals and Monetary Policy Strategy in the intermeeting period, the FOMC followed up with a very dovish statement at the September meeting.

Key points

• Key points:
• The change in forward guidance signals that interest rates will remain at the zero lower bound indefinitely and they will remain below neutral even after goals are reached
• The statement did not include meaningful changes to the current strategy on asset purchases
• While the Fed’s economic outlook depends significantly on the course of the virus, the committee's projections improved markedly from June
• Based on the latest statement and changes to the committee’s Longer-Run Goals and Monetary Policy Strategy, we expect the Fed to raise policy rates in 2025

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