FOMC latest publications
After weeks of disappointing data, rising trade tensions and renewed fears of slower global growth, the Fed set the stage for a monetary easing cycle, in line with our view.
As expected, at their March 19th-20th meeting, the Fed left rates unchanged and maintained their patient bias. This is not surprising considering the weak incoming data, the downward bias to the committee’s outlook and increasing downside risks abroad.
FOMC: Powell, an Advocate for Optimism. As we expected, the FOMC increased the Fed funds rate to 1.5%-1.75%, confirming that newly appointed Chairman is committed to maintaining continuity with his predecessor.
The ?FOMC increased the Fed funds rate to 1.25%-1.50%. Fed funds futures steepen on an optimistic economic growth outlook for 2018. The 10-year Treasury yield has moved sideways in 2017. The baseline is for a gradual increase in long-term yields with the yield curve slope flattening by an additional 15 basis points.
A December Federal funds rate increase to the 1.25%-1.50% range is warranted given upbeat third quarter economic performance with the GDP annualized growth rate revised upward to 3.3% and unemployment at a 17 year low
The November FOMC meeting is not expected to deliver any policy course alteration. Financial markets will remain watchful of the statement’s tweaks on inflation wording.