Analysts at ANZ explained that the semi-annual Monetary Policy Report to Congress yielded few surprises.
Key Quotes:
“The FOMC “expects that further gradual increases in the target range for the federal funds rate will be consistent with a sustained expansion of economic activity, strong labour market conditions, and inflation near the committee’s symmetric 2 percent objective over the medium term.””
“Separately, the Fed’s Bostic said he does not have a lot of concerns about the economy today.”
“However, he is worried about the “self-fulfilling prophecy” of an inverted yield curve.”
“The gap between 2- and 10-year yields is currently less than 25bps and has been shrinking in recent weeks.”
“Kaplan said he would need to downgrade his outlook if tensions between the US and its trade partners escalate.”
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