In the semi-annual monetary policy report on the 5th, the Federal Reserve Board pointed out that given the uncertainties in the US economy and the moderate inflationary pressures, the Fed will take appropriate measures to maintain economic expansion and ensure that the labor market is strong and the inflation rate is "symmetric." 2% target" nearby.
The Fed believes that in the first half of 2019, the US domestic financial situation still supported economic growth, but the nominal yield of US Treasury bonds fell sharply, largely reflecting investors' concerns about trade tensions and the global economic outlook, as well as the federal funds rate. Further towards the loose expectations.
The report shows that the Fed’s top-level forecast for this year’s federal funds rate is 2.4%, compared with 2.1% in 2020. Since December last year, the Fed has maintained the federal funds rate target range of 2.25% to 2.5%.
The Fed said it would adjust the details of the plan to reduce the balance sheet based on economic and financial developments. Earlier, the Fed announced that it would complete the contraction at the end of September after the March monetary policy meeting. Since the opening of the contract in October 2017, the Fed’s total assets have fallen to approximately $3.8 trillion. In addition, the bank system reserve balance has also decreased by approximately $150 billion since the end of last year.
The Fed is also evaluating the US economic outlook in its report. Among them, the median GDP growth forecast for the year 2019 is 2.1%, 2% in 2020 and 1.8% in 2021. In addition, the median unemployment rate forecast for this year is 3.6%, and the median inflation rate after energy and food prices is forecast to be 1.8%.xx