Federal Reserve
The Federal Reserve is about to hold its second Federal Open Market Committee (FOMC) meeting under its new monetary policy framework amid strange and rapidly changing circumstances. No policy change is likely on November 5. In other words, the FOMC will almost certainly leave the federal funds rate in the zero to 25 basis point […]
Monetary policymakers must be wary of tightening policy too much and too soon if they are to execute the Federal Reserve’s new average inflation targeting strategy, Chicago Fed President Charles Evans said Wednesday. Evans, in remarks for delivery to the Metals Service Center Institute, repeated that the Fed is now obliged to allow inflation to […]
The minutes of the mid-September Federal Open Market Committee meeting Wednesday showed Fed Board members and regional bank presidents worried about more intense virus outbreaks and the chance of no near-term government stimulus – weeks before both concerns seemed to be realised. The minutes added almost nothing in the way of fresh insights not already […]
Federal Reserve Chair Jay Powell Tuesday said he is more concerned about preventing worse damage from the pandemic crisis than celebrating any rebound – in fact, saying the economy is slowing and unemployment is worse than indicated. Powell’s main message was that there is an urgency to provide support now when it counts the most. […]
The upcoming week’s key events are concentrated into the middle of the week, with Wednesday’s FOMC meeting the highlight. While it is doubtful that the meeting will produce anything earth-shattering, it should confirm the shift in attention toward improving the employment situation and supporting the economic recovery rather than worrying about inflation bubbling up. As […]
There was very little chance the Federal Reserve was going to raise interest rates anytime soon but, just to make sure, the Fed’s rate-setting Federal Open Market Committee gave itself a dual justification for holding rates down indefinitely with the new monetary policy framework it announced on August 27. Not only did the FOMC give […]
The Fed’s new policy framework targeting average inflation over time puts the central bank in a stronger position to meet its employment and inflation goals, New York Fed President John Williams said Wednesday. “The new framework statement directly and effectively addresses the problems caused by a low neutral rate and persistently low inflation,” Williams said […]
Federal Reserve Chair Jerome Powell said Thursday the Fed will be “flexible” in pursuing a new “average inflation targeting” regime and not use any set “mathematical formula”. Powell, elaborating on what he called a “robust” new monetary policy strategy framework adopted earlier by the Fed’s policymaking Federal Open Market Committee, also noted the new policy […]
The pandemic’s destruction of US employment was not the trigger for the new Federal Reserve policy framework, in the works long before the virus hit. However, the jobs crisis is a perfectly appropriate context for the focus on employment. That focus had already become the hallmark of the Jay Powell era – and now it […]
Chicago Federal Reserve president Charles Evans, hosting a virtual roundtable for news media, said that while the second-quarter gross domestic product was the worst on record, declining at an annualised rate of 32.9 percent, with about 18 million unemployed workers, some improvement was seen in May and June as many states eased their lockdown restrictions. […]
