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Previewing the Federal Reserve’s review of its monetary policy strategy, “the Fed’s review will likely result in numerous new details for Fed watchers but, most important, we expect “flexible” average inflation targeting (FAIT),” said TD Securities analysts.

Key quotes

“We believe officials have already effectively adopted FAIT, signaling that they want inflation to run above 2% for a while to “make up” for recent misses.”

“FAIT lowers the bar for how much weakness is needed for renewed Fed easing. We expect “yield curve control” to be added to the Fed’s “toolkit.” We expect the dot plot to be retained, but with more emphasis on uncertainty.”