The Real Economy Blog

Jerome Powell

FOMC preview: Fed to consider adjustments key to the middle market

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Much is riding on the Federal Open Market Committee policy rate meeting next week, given recent changes in the economic landscape. Rising growth expectations, increasing interest rates, modestly higher inflation expectations and the recent challenge to the Federal Reserve’s flexible average inflation targeting regime by the fixed income market have ... READ MORE >

FOMC meeting: Fed adds to debate on further fiscal aid

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Federal Reserve Chairman Jerome Powell said in the opening statement of his news conference on Wednesday that the arrival of vaccines has bolstered the economic outlook for later this year and noted the role of monetary policy in combating the economic downturn caused by the pandemic. At the same time, Powell, in remarks following the Federal Open Market ... READ MORE >

FOMC preview: Addressing market rise in inflation expectations

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The January meeting of the Federal Open Market Committee this week presents the central bank with an opportunity to reinforce its forward guidance, which is most likely not going to change for years. At the same time, it will provide Federal Reserve Chairman Jerome Powell the opportunity to damp down growing market sentiment around inflationary risks that ... READ MORE >

FOMC preview: All is quiet

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Thursday's meeting of the Federal Open Market Committee will almost surely signal that all is quiet on the monetary front given the major changes by the central bank this year. We expect no change in the policy rate, forward guidance or the pace of asset purchases. Since the introduction of the outcome-based guidance – an inflation average of 2% over ... READ MORE >

FOMC rate decision: Waiting on September

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The U.S. economy has largely moved sideways with a downward tilt over the past month as pent-up demand waned and lower- and middle-income households pulled back on spending in anticipation of a reduced pace of fiscal aid. The Federal Reserve used its policy statement and Chairman Jerome Powell his news conference on Wednesday to underscore its ... READ MORE >

FOMC preview: Coming attractions at the Fed

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The Federal Reserve's rate decisions on July 29 will likely be remembered not for what is stated inside the policy communique. Rather, it will be long noted for what Fed Chairman Jerome Powell says at his news conference following the publication of the policy statement with respect to coming change in the Fed’s policy regime. In our estimation, both ... READ MORE >

FOMC policy update: Fed signals that the worst is behind the U.S.

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Policymakers at the Federal Reserve on Wednesday signaled that the worst of the pandemic-induced recession had passed as its summary of economic projections and “dot plot” rate forecast both implied that the zero interest-rate policy would remain in place throughout the central bank’s forecast horizon until the end of 2022. Despite that optimistic ... READ MORE >

Federal Reserve expands scope of Main Street Lending Program

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(This article was updated on Oct. 30 to reflect new terms in the Main Street Lending Program.) With the Main Street Lending Program likely to be launched in the coming days, the Federal Reserve has once again announced updates that expand the scope of the program. The adjustments include lengthening the term of the loans, easing the repayment rules and ... READ MORE >

FOMC preview: Expect cautious tone as Fed ponders policy shift

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U.S. central bankers find themselves in the most difficult of positions. They need to begin accommodating what will be a multiyear period of large annual operating deficits without appearing to subordinate monetary policy to the needs of the U.S. Treasury. That issue will be on display in multiple ways when the Federal Open Market Committee meets on ... READ MORE >