The Federal Reserve is committed to using its full range of tools to support the U.S. economy in this challenging time, thereby promoting its maximum employment and price stability goals. The coronavirus outbreak is causing tremendous human and economic hardship across the United States and around the world. Following sharp declines, economic activity and employment have picked up somewhat in recent months but remain well below their levels at the beginning of the year. Weaker demand and significantly lower oil prices are holding down consumer price inflation. Overall financial conditions have improved in recent ... (full story)

The Federal Reserve held interest rates steady in a decision announced Wednesday that came along with a tepid outlook on the coronavirus-plagued economy. In a decision widely expected, the central bank kept its benchmark overnight lending rate anchored near zero, where it has been since March 15 in the early days of the pandemic. Along with keeping rates low, the Federal Open Market Committee, which sets monetary policy, expressed its commitment to maintain its bond purchases and the array of lending and liquidity programs also associated with the virus response. The post-meeting statement labeled the current state ... (full story)

Since the last FOMC statement on June 10th, when Chair Powell pretty-much went "all-in", gold has exploded higher, the dollar has weakened, and stocks tumbled...{image} And the yield curve has flattened dramatically...{image}Neither of which are good signs for The Fed's credibility. Worse still, the market is pricing in negative rates at or before Dec 2021 and basically zero rates for the foreseeable future...{image}So, as we noted in the preview, how can Powell "out-dove" a market that is already at historic levels of implied dovishness? As BofA ominously warns, "perception that the Fed is out of ammo could cause a ... (full story)