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. … READ MORE >
federal funds rate
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. … READ MORE >
Monetary policy and inflation in the modern era
By adopting a flexible average inflation target, the Fed is using its most important tool — forward guidance – to infuse confidence in investors and the general public that it will do all it can to sustain the economic recovery needed in the wake of the coronavirus. … READ MORE >
Monetary policy in an era of pandemic economics
The Fed has put together nine different lending facilities and put forward liquidity commitments that run in the trillions. While we expect the Federal Open Market Committee to restate its commitment to keeping short-term rates as low as possible for as long as necessary, there will be more policy innovation coming in the near term. … 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. … 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. 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 rate, with 2020 to the midpoint of the current target range near 1.62%. … READ MORE >
The Fed walked a tightrope in cutting rates, and succeeded
The Fed’s careful balancing act of making insurance cuts to guard against global economic headwinds and normalize the yield curve without committing to extended cuts seems to have now gained acceptance with the markets. The entire yield curve has shifted lower since the July meeting because of the three rate cuts made this year. … READ MORE >
Fed cuts interest rate, but does not commit to more
The Federal Reserve reduced its targeted federal funds rate by a quarter point to a range between 1.5 and 1.75 percent at its October meeting Wednesday. In its policy statement, the committee removed the phrase “act as appropriate,” possibly opening the door to taking a wait-and-see approach to additional rate cuts. The change to the policy statement notes the central bank will monitor incoming information as it “assesses the appropriate path” of rates. … READ MORE >
Expect the Fed to cut its target rate by a quarter point
We expect the Federal Reserve to cut the federal funds rate this week by 25 basis points to a range between 1.50% to 1.75%. … READ MORE >
Fed cuts interest rates with another cut likely in September
Reductions or increases in U.S. Federal Reserve’s policy rate are often like trying to kill a mosquito with an anvil; they may get the job done but the fallout is always widespread and sure to cause a commotion. So it is with today’s rate cut as the Federal Reserve Open Market Committee sought to provide a cushion to a rapidly deteriorating global economic environment that will likely spill over into the U.S. economy and muted inflation. … READ MORE >