Monex Europe | The FOMC kept rates unchanged, extended its swap facility, and added language to its statement emphasizing that the path of the US economy depended heavily on the path of the virus. In our view, outcome-based forward guidance is likely as early as September, when the FOMC will have a new batch of projections, as well as hard data indicating the costs of the second wave of COVID-19 infections.
Better placed observers, such as the Financial Times, bet this week’s FOMC meeting should serve as a test of its members’ mood regarding the planned increase in US rates. Janet Yellen lacks the authority her predecessors commanded and wants to make sure this critical decision garners full support.
Barclays | We expect the Fed to remain on hold at its September meeting, deferring rate hikes while it assesses renewed risks to the outlook.
And what if there is no lift-off in September?
FOMC members need more evidence that inflation is moving toward their goal and the improvement in the labour market is sufficient and sustainable.
The Corner | June 17, 2015 | The Federal Open Market Committee’s policy statement, due to be released today at 1800 GMT, is widely expected to signal a first rates’ hike in September. For the first time in eight years the outcome of the meeting is not constrained by the “forward guidance” commitment. Is the US economy healthy enough?