November 5, 2020

THE FED REMAINS SILENT ON CHANGES TO QE AND CALLS FOR FURTHER FISCAL STIMULUS

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In Short

As widely expected, the November meeting was rather uneventful: chair Powell seized the opportunity to reiterate the strong forward guidance on rates illustrated in September and to reassure on the capability of unorthodox measures to cushion a possible downturn of the economy.
THE FED REMAINS SILENT ON CHANGES TO QE AND CALLS FOR FURTHER FISCAL STIMULUS
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Highlights:

  • Chair Powell underlined the progress the economy has made so far but stressed the downside risks related to Covid.
  • The Fed is not out of ammunition, but lost income due to the crisis can only be restored by fiscal policy, he reiterated.
  • FOMC members have discussed on how to improve QE should the economy require additional momentary stimulus. Details may be disclosed at the December meeting.
  • Starting from December, the information on the FOMC economic thinking will be enhanced, with more details on the balance of risks around the outlook.

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THE FED REMAINS SILENT ON CHANGES TO QE AND CALLS FOR FURTHER FISCAL STIMULUS
November 5th, 2020

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