Welcome to Federal Open Market Committee day - FOMC preview
The FOMC meeting statement is due Wednesday 16 September 2020 at 1800 GMT.
- It will include the Summary of Economic Projections & dot plot
- Federal Reserve Chair Powell press conference follows at 1830 GMT.
Earlier previews are here (note, no change, or very little is expected, the previews are thus only brief):
- At the Jackson Hole Symposium in August, FOMC Chair Jerome Powell made clear the Committee's intent to pursue the strongest labour market and economy possible.
- To improve the likelihood of achieving this aim, Chair Powell announced during his speech that the 2.0%yr inflation target would now be assessed on average over the cycle. This opens up the opportunity to run the economy 'hot' for a time to reduce or eliminate "shortfalls of employment from its maximum level".
- Inflation in the US has disappointed for a decade and is currently below 2.0%yr. Arguably, there is then cause for the current stance to be maintained for the foreseeable future, and potentially for more easing. Updated forecasts and the Committee's assessment of risks will therefore be closely scrutinised, despite policy remaining on hold this month.
- The Fed won't alter the actual pace or maturity composition of operations
- "Such a shift in language would largely represent a mark-to-reality, as market functioning has largely returned to normal and both Powell and the minutes have noted that purchases are already providing accommodation"