ASI: Fed will likely speak reassuring words on pandemic and inflation

ASI: Fed will likely speak reassuring words on pandemic and inflation

27 juli 2021

Fed
Federal Reserve.jpg

This is a short commentary by Luke Bartholomew, Senior Economist at Aberdeen Standard Investments, on this week's FOMC meeting.

“The market is excited at the prospect of getting some sort of fresh signal from the Fed next week. But that’s unlikely to happen and Powell is more likely to try to play for time.

“Much has been made of the signs of discord about policy on the committee. But the core individuals that are the real power brokers of the Fed are all still broadly aligned on the trajectory of interest rates. Moreover, the inevitable spread of the delta variant is certainly a consideration for the Fed, which adds to downside risks.

“Last month the Fed surprised many with forecasts implying earlier interest rate increases. They aren’t going to want to pour oil on that fire now. So what we are likely to see is reassuring words about the Fed tracking the delta variant and reaffirming its belief that inflation is transitory. Jackson Hole next month is the earliest that we will see any significant movement on policy.”

Gerelateerde berichten