FOMC Statement: March 3rd

In an unscheduled and abbreviated statement, the Fed announced an emergency 50bp cut to 1-1.25% in the Fed Funds rate, similar to the response to 9/11.

Key points

• Key points:
• We believe the Fed will cut rates an additional 25-50bp in March/April
• We anticipate the Fed will be overly cautious with its balance sheet policy, possibly to the point of increasing its asset holdings modestly beyond what would be consistent with the growth in nonreserve liabilities

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