FOMC Brings Back the Projections; Economy’s Long Trek Back Boosts Treasuries

Although the Fed offered no new programs today, the bond market nonetheless rallied.

June 11, 2020

It wasn’t in response to what the Fed did per se, but rather was in response to the Fed’s forecasts. Although the Fed’s indeterminate “Longer run” projections remain optimistic, its projections for the more finite interval through 2022 shows the economy remaining below full employment and shy of the 2% inflation target, and therefore correspondingly, requiring no interest rate hikes presumably not only over that interval, but beyond.


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