Participants continued their discussion related to the ongoing review of the Federal Reserve's monetary policy strategy, tools, and communication practices. At this meeting, they discussed potential changes to the Committee's Statement on Longer-Run Goals and Monetary Policy Strategy. Participants agreed that, in light of fundamental changes in the economy over the past decade—including generally lower levels of interest rates and persistent disinflationary pressures in the United States and abroad—and given what has been learned during the monetary policy framework review, refining the statement could be helpful in ... (full story)

Since the July 29th Fed Statement, gold is unchanged, stocks are up significantly and bonds and the dollar lower... {chart} Interestingly, the market's Fed rate trajectory expectations tightened quite significantly with negative rates now off the table for Dec 2021...{chart}Although we do note that there is no full hike priced in until 2025! As we detailed earlier, the July FOMC did not "set the foundation" for future policy tweaks, like enhanced forward guidance or yield curve targeting. Analysts believe this sort of policy detail may only follow the Fed's strategy review, likely due in September. ... (full story)

The Federal Open Market Committee released minutes Wednesday from its July policy meeting. At the July 28-29 session, the Federal Reserve’s policymaking arm voted to keep short-term interest rates anchored near zero, citing an economy that was falling short of its pre-pandemic levels. Officials at the meeting “agreed that the ongoing public health crisis would weigh heavily on economic activity, employment, and inflation in the near term and was posing considerable risks to the economic outlook over the medium term.” Because of how much impact the virus will have on the economy, FOMC members asid they expect to hold ... (full story)