Cautious Fed to Hold Rates at Zero Through 2022

The Fed’s policy-making committee emerged from its scheduled two-day meeting this afternoon with little new to add to its April meeting statement. The key phrase was that the economy still faces “considerable risks.”

With the overnight target already at zero at its lower range, and negative rate policy dismissed, there was no change announced in the funds rate. In the first dot plot/interest rate forecast since December, committee members indicated the overnight target would remain zero bound through at least 2022. In his post-meeting press conference, Powell reiterated that the FOMC is “not even thinking about raising rates.”

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