Fed Revises Down Growth Forecast, Chooses to Maintain Current Policies
Today, the Federal Reserve released the minutes of its June Federal Open Market Committee meeting. Noting strong economic headwinds, the FOMC revised down its
Jul 31, 2020280.4K Shares7.7M Views
Today, the Federal Reserve released the minutesof its June Federal Open Market Committee meeting. Noting strong economic headwinds, the FOMC revised down its forecasts for growth, inflation and employment. The FOMC essentially determined that conditions had deteriorated, but not enough to warrant any changes to the Fed’s behavior:
“„In their discussion of monetary policy for the period ahead, members agreed that it would be appropriate to maintain the target range of 0 to 1/4 percent for the federal funds rate. The economic outlook had softened somewhat and a number of members saw the risks to the outlook as having shifted to the downside. Nonetheless, all saw the economic expansion as likely to be strong enough to continue raising resource utilization, albeit more slowly than they had previously anticipated. In addition, they saw inflation as likely to stabilize near recent low readings in coming quarters and then gradually rise toward more desirable levels. In sum, the changes to the outlook were viewed as relatively modest and as not warranting policy accommodation beyond that already in place.
This** **recognition of the troubles but hesitancy to do anything— from buying up corporate debt to raising the inflation target to dropping money from a helicopter — has a number of prominent economists perplexed. (See Brad DeLongand Paul Krugman.) There are a variety of reasons why; primary among them is the sense that the economy is not in a state of “emergency,” and therefore the Fed should stick to conventional policy-making instruments. But I would add one other important one: Congressional action would be far less unusual, and far more immediate, than what the Federal Reserve would do.
Dexter Cooke
Reviewer
Dexter Cooke is an economist, marketing strategist, and orthopedic surgeon with over 20 years of experience crafting compelling narratives that resonate worldwide.
He holds a Journalism degree from Columbia University, an Economics background from Yale University, and a medical degree with a postdoctoral fellowship in orthopedic medicine from the Medical University of South Carolina.
Dexter’s insights into media, economics, and marketing shine through his prolific contributions to respected publications and advisory roles for influential organizations.
As an orthopedic surgeon specializing in minimally invasive knee replacement surgery and laparoscopic procedures, Dexter prioritizes patient care above all.
Outside his professional pursuits, Dexter enjoys collecting vintage watches, studying ancient civilizations, learning about astronomy, and participating in charity runs.
Latest Articles
Popular Articles