{"id":293298,"date":"2020-06-11T07:32:29","date_gmt":"2020-06-10T21:32:29","guid":{"rendered":"https:\/\/www.gomarketingteam.com\/articles\/a-cautious-fed\/"},"modified":"2021-02-19T12:13:44","modified_gmt":"2021-02-19T01:13:44","slug":"a-cautious-fed","status":"publish","type":"post","link":"https:\/\/www.gomarkets.com\/en\/articles\/central-banks\/a-cautious-fed\/","title":{"rendered":"A Cautious Fed"},"content":{"rendered":"

By Deepta Bolaky<\/strong>
\n\u00a0@DeeptaGOMarkets<\/a><\/p>\n

A Cautious Fed<\/strong><\/h4>\n

FOMC Meeting <\/strong><\/h4>\n

Investors were eagerly looking forward to the Fed\u2019s statement and forecasts for clues on how the Fed is viewing the health of the economy after easing lockdown measures. Global central banks have played a crucial part in absorbing the pandemic-induced shocks in the global economy. Together with huge fiscal intervention, central bankers have swiftly deployed various monetary tools to keep credit flowing and provide support to businesses and households.<\/p>\n

Dot Plots<\/strong><\/p>\n

Even though the financial conditions have improved from the support of the policy measures that was put in place, the Fed highlighted that the ongoing health crisis will continue to weigh on the economic activity, employment, and inflation in the near- term and may pose considerable risks for the medium-term outlook. On Wednesday, the Fed decided to maintain the target range for the federal funds rate at 0 to 0.25%.<\/p>\n

\u201cThe Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.\u201d<\/em><\/p>\n

Most importantly, market participants took note that the US interest rates will stay near to zero through 2022, ruling out the probability of raising rates anytime soon and a V-shaped recovery for the US economy.<\/p>\n

\"\"<\/p>\n

Economic Projections<\/strong>\u00a0<\/strong><\/p>\n

The Fed refrained from providing any forecasts during the pandemic given the tremendous uncertainties about the economic outlook. Much attention was, therefore, on the interest rate and economic forecasts.<\/p>\n