今天Fed消息的总结
Fed Minutes Suggest New Framework Coming, YCC Isn’t
Sadly we no longer have timely, easily digestible headlines from the Fed minutes, so after a quick read-through here are some initial thoughts of the document:
• There was significant discussion of the Fed’s long-run strategy, both in terms of the general policy review and in terms of the specific utility that it might provide in the current context. It certainly looks like changes are coming, perhaps soon...and likely in the path of justifying more easy policy.
• The characterization of the economy is about what you’d expect: the consumer has rebounded nicely thanks to the fiscal stimulus, but the business sector is lagging. Failure to provide more fiscal support presents downside growth risks, and in any event uncertainty remains very high. Inflation is likely to remain subdued.
• It was amusing to see some reference that the Everest of asset purchases might be providing some accommodation rather than simply improving market functioning. Gee, ya think so? There may be a more formal acknowledgement of this rationale for asset buying in the future.
• There was a lot of discussion of yield curve control, and it seems the majority thought that at this juncture the net benefits look pretty skimpy. That isn’t to rule it out at some point in the future, of course, but it doesn’t look like an attractive option in the near term.
• Instead, some sort of forward guidance is likely, probably in the form of outcome-based thresholds. This is pretty widely expected at this point, I think.
• There were a few references to possibly needing further accommodation, so I think we know where this is going. If the labor market improvement stalls or inflation doesn’t jump back up, more easing is probably coming down the pipe -- that would be an easy justification for implementing explicit guidance.
• There was some reference to the dangers of inflation expectations becoming unanchored, even though UMich 5-10 year expectations are the highest in 4 years or so. Hmmm...
Overall, the minutes show a committee that’s inclined to be dovish, though of course we all knew that. The lack of immediacy on YCC may be disappointing to some, but overall this isn’t too far from what we should have expected I think.
Fed Minutes Suggest New Framework Coming, YCC Isn’t
Sadly we no longer have timely, easily digestible headlines from the Fed minutes, so after a quick read-through here are some initial thoughts of the document:
• There was significant discussion of the Fed’s long-run strategy, both in terms of the general policy review and in terms of the specific utility that it might provide in the current context. It certainly looks like changes are coming, perhaps soon...and likely in the path of justifying more easy policy.
• The characterization of the economy is about what you’d expect: the consumer has rebounded nicely thanks to the fiscal stimulus, but the business sector is lagging. Failure to provide more fiscal support presents downside growth risks, and in any event uncertainty remains very high. Inflation is likely to remain subdued.
• It was amusing to see some reference that the Everest of asset purchases might be providing some accommodation rather than simply improving market functioning. Gee, ya think so? There may be a more formal acknowledgement of this rationale for asset buying in the future.
• There was a lot of discussion of yield curve control, and it seems the majority thought that at this juncture the net benefits look pretty skimpy. That isn’t to rule it out at some point in the future, of course, but it doesn’t look like an attractive option in the near term.
• Instead, some sort of forward guidance is likely, probably in the form of outcome-based thresholds. This is pretty widely expected at this point, I think.
• There were a few references to possibly needing further accommodation, so I think we know where this is going. If the labor market improvement stalls or inflation doesn’t jump back up, more easing is probably coming down the pipe -- that would be an easy justification for implementing explicit guidance.
• There was some reference to the dangers of inflation expectations becoming unanchored, even though UMich 5-10 year expectations are the highest in 4 years or so. Hmmm...
Overall, the minutes show a committee that’s inclined to be dovish, though of course we all knew that. The lack of immediacy on YCC may be disappointing to some, but overall this isn’t too far from what we should have expected I think.