FOMC: The road to neutral – Standard Chartered

Analysts at Standard Chartered note that the FOMC raised the fed funds target range (FFTR) by another 25bps to 1.75-2.0% on 13 June.

Key Quotes

“It also upgraded the median 2018 FFTR projection to 2.4% (from 2.1%), and more unexpectedly, moved up the 2019 median to 3.1% (from 2.9%), raising the expected path of policy and leading to a notable flattening in money-market curves around the 2019 point.”

“The interest rate on excess reserves (IOER) was raised by 20bps, as telegraphed in the May meeting minutes, for technical reasons.”

“Long-run projections were unchanged, indicating that the FOMC continues to see recent and near-term projected economic strength as cyclical, for now. These decisions are largely in line with our expectations.”

“There were hawkish changes to the statement.”

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