The Federal Reserve lifted its federal funds policy rate to a range between 1.5% and 1.75% on Wednesday as it moves to restore price stability over the medium term. We now expect the Fed to hike the policy rate by 50 basis points in July and September and then by 25 basis points at each successive ... READ MORE >
federal funds rate
Updated FOMC call: Fed to hike policy rate by 75 basis points
The economist John Maynard Keynes once famously quipped, “When the facts change, I change my mind.” And so it goes ahead of the Federal Open Market Committee’s policy meeting this week. Based on movements inside the rate markets, quickly changing inflation expectations and a rattled investor class, we ... READ MORE >
FOMC decision: Policy, price stability and balance sheet strategy
Price stability is a precondition of maximum sustainable employment, sustainable growth at the long-term rate of 1.8% and financial stability. The Federal Open Market Committee's decision on Wednesday to increase the federal funds rate by a half-percentage point to a range between 0.75% and 1% in ... READ MORE >
FOMC preview: Rate hikes and balance sheet reduction are up next
Next week’s Federal Open Market Committee meeting will kick off an extraordinary two months of policy decisions by the Federal Reserve in which we expect the central bank to hike its policy rate by 100 basis points. These rate increases, starting with a 50 basis-point increase on Wednesday. will occur ... READ MORE >
FOMC meeting: Setting the stage for three rate hikes in 2022
The Federal Reserve on Wednesday set the stage for multiple increases in the federal funds policy rate next year by accelerating the tapering of asset purchases to $30 billion per month, up from $15 billion. The tapering should be wrapped up by March. This provides increased flexibility for the ... READ MORE >
FOMC: Fed policy to remain steady amid economic uncertainty
The Federal Open Market Committee on Thursday kept its policy rate steady at a range between zero and 25 basis points and made little meaningful change to its policy statement. The Fed continued its asset purchase program at $120 billion per month and held the interest it pays on reserves at 0.1% and ... READ MORE >
Monetary policy and inflation in the modern era
The Fed is embarking on a new era in monetary policy, switching from its point target of 2% inflation to a target range of 1% to 3%. This change is predicated on longer-run structural changes in the economy that are inherently disinflationary, a real neutral interest rate near zero and much slower growth ... READ MORE >
Monetary policy in an era of pandemic economics
The Federal Reserve has moved the federal funds rate to the zero bound in a series of swift responses to the outbreak of the coronavirus and the market’s anticipation of the shock to economic growth and market stability. The Fed has put together nine different lending facilities and put forward ... READ MORE >
The Fed cut its policy rate by a half percentage point. Expect more to come.
The Federal Reserve on Tuesday reduced its policy rate to a range between 1.0% and 1.25% as the central bank implemented a preemptive cut to bolster financial conditions as the coronavirus continues to spread. The use of monetary firepower is a clear signal to policymakers and investors that there will be ... READ MORE >
Expect the Fed to stick to the script
We expect the Federal Reserve will keep its policy rate in a range between 1.50% and 1.75% at the December FOMC meeting on Tuesday and Wednesday. The major interest of investors and policymakers will naturally be the movement in the dot plot, which we expect to move into alignment with the current policy ... READ MORE >