#Fed #FOMC statement largely unchanged
- NEW qualitative outcome-based forward guidance for QE program that links the horizon to max employment + price stability goals
- no change to composition or size of QE, but a floor of "at least" $120bn per month
- NEW qualitative outcome-based forward guidance for QE program that links the horizon to max employment + price stability goals
- no change to composition or size of QE, but a floor of "at least" $120bn per month
The latest economic projections:
- Stronger near-term growth expectations
- Quite strong #GDP expectations for 2021
- Lower unemployment projections: below 4% in 2023
- #Inflation only a tad firmer: below 2% till 2023
- #Fed funds rate at zero through 2023
- Stronger near-term growth expectations
- Quite strong #GDP expectations for 2021
- Lower unemployment projections: below 4% in 2023
- #Inflation only a tad firmer: below 2% till 2023
- #Fed funds rate at zero through 2023
The #Fed's #GDP growth & #unemployment forecasts help explain why the Fed decided not to increase size or composition of QE.
They foresee rather strong growth in 2021 with a rapid decline in the unemployment. I wonder what their labor force participation rate assumptions are.
They foresee rather strong growth in 2021 with a rapid decline in the unemployment. I wonder what their labor force participation rate assumptions are.
Risks still strongly skewed to the downside -- not surprising given the increased optimism
Headline #inflation could surprise the #Fed in 2021, especially given their optimistic take on GDP growth and employment progress
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