FOMC Minutes: Further easing looks unlikely – UOB
|Senior Economist at UOB Group Alvin Liew reviewed the latest publication of the FOMC Minutes of the December meeting.
Key Quotes
“The minutes of the 15-16 Dec 2020 FOMC meeting showed that Fed officials unanimously agreeing to keep the pace of asset purchases unchanged, and that ‘nearly all’ preferred to keep the current mix of assets bought intact with some open to ‘future adjustments’ if needed.”
“The participants continued to see the uncertainty surrounding the economic outlook as elevated even as they regarded the positive news on vaccine development as an ‘upside risk’ and will further strengthen the medium-term outlook for household spending.”
“The unexpected ‘Blue Wave’ has led the markets to reposition for bigger fiscal stimulus and infrastructure spending as well as tax changes (tax cuts for households while tax increase for corporates and wealthy individuals).”
“We now price in a lower probability (40%) for the Fed to provide more monetary accommodation. If the Fed were to ease, it will still do so from its existing tool kits, and the first in line will still be the asset purchase program. We continue to hold the view that the Fed will keep policy rates at the current 0.0-0.25% region at least until 2023 and will not want to push rates beyond zero, into negative territory.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.