2020-06-29 10:26:47, , www.FTPortfolios.com
Content Categorization
/Business & Industrial
/News/Business News
/Law & Government/Government
Word Count:
498
Words/Sentence:
23
Reading Time:
3.32 min
Reading Quality:
Intermediate
Readability:
11th or 12th
As a result, we think it would be useful to follow the Fed's projections in the quarters ahead, using the 5.0 – 5.5% range as a proxy for when the Fed expects to start once again lifting short term rates.
But the rise in inflation will depend on how quickly the economy recovers, how fast consumers and businesses back away from the demand to conserve cash, and how quickly the Fed recognizes these changes by altering the pace of asset purchases.
Notably, the Fed still projects that the average short-term interest rates target over the long run will be 2.5%, no different than it projected in December, before the Coronavirus Recession.
The Fed's economic projections show a deep recession followed by above-trend growth thereafter as the economy heals, with no permanent damage to GDP.
Looking forward, expect more of the same in 2020: continued expansion of their balance sheet and short-term rates near zero.
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