• Notes From The Desk | FOMC Announcement

Notes From The Desk | FOMC Announcement Mar 17 2021

Executive Summary of Today’s FOMC Announcement

The Announcement

  • As expected, no change to the overnight rate or Quantitative Easing Programs
  • The Fed continues to project their next rate hike for 2023
  • The central bankers specifically remind the market that they will be content to let inflation run above 2% for sometime in order to allow for full employment
  • Upgraded forecasts: YoY GDP growth to 6.5% by Q4 before slowing to 3.3% next year and 2.2% in 2023.   Unemployment forecasted to hit 3.9% by end of 2022

Our Take.

  • Short-end rates, less than 5y, should remain well anchored, with the Fed in no rush to hike.
  • Long-end rates, greater than 5y, expected to drift higher but at a slower pace than the past few months.  Instead, we expect a slow grind higher based on good data point (job numbers) over the next several months.
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