FOMC Chairman Jerome Powell reiterated on Tuesday that the Federal Reserves remains committed to using all of its tools to support the economy through the coronavirus crisis. "We will continue to provide strong support," Powell told the US Senate Banking Committee and noted that it is likely they will need more fiscal support. "Inequality is an important problem in our economy, it holds our economy back," Powell added.
FED'S LAST EMERGENCY MEASURES REVIEW
Chicago Federal Reserve President Charles Evans explained that the US central bank will likely need to keep monetary policy easy for some time after 2023 in order to meet its inflation goal, even once it begins raising interest rates. Evans repeated has repeated the view that the economy, while improving, remains weak. His forecast for the economy to end the year about 3.5% smaller than it was last year, and to grow at about a 4% pace next year, depends on getting further fiscal stimulus.
The Federal Reserve's Williams has stated that the US economy has started to recover, but said it is 'nowhere near where we want to be''. Williams also explained that the Fed is not targeting inflation expectations, which can't be measured exactly.
Jerome Powell, Chairman of the Federal Reserve System, is responding to questions at the National Association for Business Economics' 62nd Annual Meeting. Key quotes: "Global central bank coordination is essential, ongoing." "Monetary policy is not the first round of defense on financial instability."
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November Fed Decision Review
The Fed has left its rates unchanged as expected, making minor changes to the accompanying statement. At first, it seemed that the world's most powerful central bank was succeeding in not rocking the boat, striking a balance between expressing content about the recovery so far but airing concern about the risks of the virus. However, when Federal Reserve Chairman Jerome Powell began speaking, he gave the market reasons to tune in. He began by saying that the pace of the recovery has moderated. That served as a hint that the Fed is ready to act.
October Fed Decision Review
Minutes of the FOMC's September 15-16 meeting showed on Wednesday that participants believe the economic activity was recovering faster than expected from its depressed second-quarter level according to incoming data.
Analysts at Wells Fargo believe the Federal Reserve will not raise rates until at least 202 and possibly longer. Higher inflation surprises could change the outlook. They see a GDP growth of around 30% during the third quarter (annualized).
September Fed Decision Review
Read my dot-plot, no new rate hikes – that is the message from the Fed. The new projections are pointing to low chances of higher borrowing costs in 2023, certainly not beforehand. That is merely a repeat of the previous messages by the Fed, as published in June. The accompanying statement has undergone a change, committing to an average inflation target – yet that is also unsurprising given the dovish policy shift that Powell delivered in late August.
The Federal Open Market Committee (FOMC) on Wednesday announced that it left the benchmark interest rate, the target range for federal funds, unchanged at 0%-0.25% as widely expected. In its updated Economic Projections, the FOMC said it expects the gross domestic product (GDP) to contract at a softer pace than the previous forecast of 6.5% in 2020 and sees unemployment at 7.6% at year's end, compared to 9.3% in June projection.
August Fed Decision Review
Read my dot-plot, no new rate hikes – that is the message from the Federal Reserve. The new projections are pointing to low chances of higher borrowing costs in 2023, certainly not beforehand. That is merely a repeat of the previous messages by the Fed, as published in June. The accompanying statement has undergone a change, committing to an average inflation target – yet that is also unsurprising given the dovish policy shift that Federal Reserve Chairman Jerome Powell delivered in late August.