Publications

The FOMC made upward revisions to their GDP and inflation outlook and lowered its estimates of the unemployment rate, but kept its projections of the policy rate at the zero lower bound at least until 2023.

Today’s statement confirms our outlook that a successful vaccination strategy is paramount to support the economic recovery, interest rates will remain low for a prolonged period and tapering remains off the table at least until 2022.

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.

The Fed released its updated Statement on Longer-Run Goals and Monetary Policy Strategy, which reflect changes in the economy over the past decade and explains how policymakers are planning to conduct monetary policy. The statement also enhances transparency, accountability and effectiveness of monetary policy.

As expected, the Fed left interest rates unchanged and reaffirmed its commitment to, at a minimum, maintaining the current pace of asset purchases while also defending its expanded use of its lending powers until the economy is on the road to recovery.

The June 9-10 FOMC meeting statement provided a very dovish perspective on the economy. It reinforced the severe damage from Covid-19 to both economic activity and the labor market.

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.

As we expected, the Fed lefts its benchmark interest rate by unchanged at 1.5-1.75% and made only minor adjustments to the October statement.