FOMC meeting: Low rates for longer – UOB
|Senior Economist at UOB Group Alvin Liew reviewed the key FOMC event.
Key Quotes
“In a significantly re-worded FOMC policy statement, the Federal Reserve in September 2020 kept policy rates unchanged… This reflects the Fed’s recent review and adopting of a new strategy of Average Inflation Targeting (AIT) and putting emphasis on "broad and inclusive" employment.”
“According to its updated September summary of economic projections, the FOMC will keep its policy rates at 0.0%-0.25% range (Median at 0.1%) until at least 2023. It will also maintain the current pace of Treasury purchases (at US$80bn a month) and mortgage-backed securities (at US$40bn).”
“The FOMC’s latest economic projections showed a significant improvement to its 2020 GDP and unemployment projections… Inflation projections were revised higher but both headline and core PCE is projected to average 2.0% only in 2023.”
“Going forward, as Powell has said that the guidance given in the September FOMC is “durable”, the Fed will likely maintain this accommodative monetary policy and economic outlook for now and we believe Fed policy will likely stay out of the limelight ahead of the 3 November US Presidential elections.”
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