The @federalreserve’s actions, language and overall tone today were very much like those of a #flight crew that has taken on precautionary #fuel to make sure the plane can arrive at a yet-to-be-determined destination without problems.
The fact is that there is great uncertainty regarding the progression of the #coronavirus #pandemic and the timing of a return to #economic normalcy and the #Fed has been diligently preparing for this.
More important than the public statements today were the discussions that took place around the #Fed’s boardroom table regarding the evolving #policy toolkit and potential implementation if things become worse for the #economy.
However, we may not learn about that until the #FOMC meeting #minutes are released three weeks from now.
Finally, the key to near-term #MonetaryPolicy will be all about the #Fed’s dual mandate, but with one side of the mandate being the primary target (#employment) and the other governing how far the central bank is willing to go (#inflation).
The fact is that the #Fed likely has an impressively long runway yet, as it could be a very long time before we regain full #employment, which didn’t even appear to be #inflation-accelerating at a 3.5% #unemployment rate.
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