März 17, 2021

The Fed sticks to its plans despite looming demand surge and market worries

Share on facebook
Share on twitter
Share on linkedin
Share on email

In Kürze

In the March meeting the Fed showed a strong conviction that the sizeable rounds of fiscal stimulus will have only a transitory effect on the economy, not capable to driving substantially up expected and, above all, realized inflation.
The Fed sticks to its plans despite looming demand surge and market worries
Share on facebook
Share on twitter
Share on linkedin
Share on email

Highlights:

 
  • The message sent at the March meeting was one of strong continuity: short-term forecasts for growth and inflation were revised substantially up, and the healing of the labour market is expected to proceed faster. However, the medium-term view did not change much, especially for inflation.
  • As a consequence, the monetary policy path remains the same: no rate hikes are deemed appropriated before end-2023. Similarly, any talk of tapering remains premature. Any change of direction is predicated on actual data, not on expectations.
  • The rise in bond yields was put into perspective: overall financial conditions remain favourable and do not require any changes to the composition of bond holdings. On banking, changes to the leverage regulation and to restrictions on dividend are forthcoming, but not details were provided.

Download the full publication below

The Fed sticks to its plans despite looming demand surge and market worries
17. März 2021

Also interesting

EU flag green
July 26, 2021
Focal Point

ECB greening of the credit market to start in 2022

triple peak
July 23, 2021
Market Perspective

Market Perspectives ǀ Overfretting about the triple peak

European-Central-Bank-in-Frankfurt_web
July 22, 2021
Market Commentaries

ECB sends a dovish message as new strategy increases threshold for raising rates