Monetary Policy & Inflation | US
FOMC Preview: More Signalling Than Forecasting
- By Dominique Dwor-Frecaut and George Goncalves
- 3 min read
The Fed probably has three key objectives at this week’s meeting. These are managing the risks to the recovery, strengthening the credibility of its new average inflation targeting (AIT) framework, and jawboning the market into an orderly transition to post-pandemic ranges.
In his 23 February testimony to Congress, Chair Jerome Powell stressed the risks to the recovery. ‘Vaccinations offer hope for a return to more normal conditions later this year. But the pace of vaccinations, the rate of decline in the spread of the virus, and the speed with which people return to normal activities all remain highly uncertain, particularly given the emergence of new, apparently more contagious strains’.
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