The Fed also revised down its 2019 real GDP forecast to 2.1 percent from 2.3 percent and its 2020 forecast to 1.9 percent from 2 percent. The central bank also revised up its estimate of the unemployment rate in 2019 to 3.7 percent from 3.5 percent and expects an increase in the unemployment rate in 2020 and 2021 with the long run central tendency standing at 4.3 percent. The estimate of inflation was revised down to 1.8 percent for 2019 from 1.9 percent and remains unchanged and on target at 2 percent over the next two years. Just as important as the federal funds rate and the dot plots was the slowing of the balance sheet reduction to $35 billion per month from $50 billion per month starting in May with the balance sheet reduction effort terminated in September, 2019. Our calculations imply that each additional $20 billion in balance sheet reduction is equal to about a 5 basis-point increase in financial tightening. The Fed is no longer truly concerned, if ever it truly was, about an overheating economy. With inflation risks off the table in the near term, the Fed will begin to turn its attention to using open mouth operations to support financial markets, as investors attempt to ascertain if the current slowdown is a growth head fake or a harbinger of things to come.