Fed meeting expectations By Abhishek Bansal, Abans Group
Below are Views On Fed meeting expectations By Abhishek Bansal, Abans Group
The Federal Open Market Committee is scheduled to take a decision on interest rate later today followed by a press conference from Fed Chairman Jerome Powell which may give further direction to the market.
We do not see any major change in the current policy framework. Fed is likely to keep the interest rate near zero; further, it may continue buying at least $120 billion worth of bonds every month to keep markets liquid.
However, it would be important to watch Fed comments on US economic condition post robust vaccination drive and new pandemic relief package. The Fed’s Economic Projections indicated December GDP growth at 4.2%, unemployment rate at 5%, and inflation at 1.8%. However, Goldman Sachs recently raised its GDP forecast to 7% for the full year and a drastic drop in the unemployment rate. Fed’s comments on inflation along with rising global bond yields would also be an important point to watch out for. Fed may adjust some of its bond-buying programs to keep long-term yields under control.
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