By Yasin Ebrahim
Investment.com – Federal Reserve policy makers continue to favor the pace of continued monetary support to keep the rally on track at a time when data arrives showing bright prospects. economic activity and employment, according to the Federal Reserve minutes released Wednesday.
At the conclusion of its previous meeting on March 18, the Federal Open Market Commission kept its benchmark rate in the range of 0% to 0.25% and committed to maintaining bond purchases at pace. 120 billion USD monthly.
At the meeting, the bank, despite acknowledging the recent improvement of the economy and raising inflation, maintained its forecast of keeping interest rates close to zero until 2023. Of the 12 FOMC members, four cities member calls for a rate hike by 2022.
Market participants also appear to be betting on the Fed lowering on a longer-interest math model as the economy reopens – supported by a faster vaccine rollout – earning get speed.
The Fed’s futures market is now predicting a rate hike in 2022, up from 2024 earlier this year, amid rising inflation.
The 10-year inflation breakeven, a key measure of inflation expectations, is valuing annual inflation around 2.4%, well above the Fed’s 2% target.
However, there are some on Wall Street who believe that growing fears about fleeing inflation and that the Fed’s earlier-than-expected rate hikes or bond cuts may be somewhat overdue due to the economy. in the global economy, there is still no meaningful recovery.
“The Fed has changed its policy many times in history, but I don’t see it as a big risk. If you look at the global economy, there’s still a lot of trouble,” said Eric Diton, president and chief operating officer. The Wealth Alliance, said in a recent interview with Investing.com. “This is not the world like the 1918 Spanish flu, this is a very interconnected world of commerce. and economics, “added Diton.
Fed Chairman Jerome Powell reiterated during the press conference – which took place after the monetary policy meeting – that the central bank would provide full guidance ahead of any proposed policy adjustments.
“We are going to give a signal that we are on a path we can achieve substantial growth to consider diminishing. I think what we’ve learned from the experience of decades, is to give. change very carefully, very clearly, [and] very good first… ”said Powell.
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