FOMC Recap

The FOMC held rates steady at 3.75% while signaling a hawkish, data-dependent shift under new Chair Kevin Warsh. The introduction of five taskforces to review monetary policy frameworks has introduced significant market uncertainty and volatility.

Key Takeaways

• 1.The FOMC maintained the policy rate at 3.75% but signaled a hawkish shift with the creation of five new taskforces and a median dot plot increase.
• 2.Kevin Warsh's arrival as Chair marked a departure from previous forward guidance practices, introducing more volatility and uncertainty for markets.
• 3.The Fed is effectively exporting inflation pressure globally, contributing to a stronger US dollar and creating headwinds for other central banks like the Bank of Canada.

Table of Contents

• FOMC Recap — Markets Lost a Friend Today
• Statement Changes
• Dots
• Price Stability Warning
• Five Taskforces Established
• Projections—Weaker Growth, More Inflation, Less Unemployment
• Balance Sheet
• Press Conference Transcript
• Where to From Here?

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