The Fed confirms its move to forward guidance and permanent zero

Today’s commentary
Recently, I wrote a series of posts predicting that the Fed would give up on QE and move toward forward guidance in order to be able to normalize policy. Nevertheless, I have also been saying for quite some time I believe the US zero rate policy is ‘permanent’. There are big implications from this for markets, risk, asset allocation and banks. Yesterday, we finally got an extraordinary confirmation from two Fed papers that the Fed is indeed going for forward guidance. But the papers also indicated the Fed has moved toward a near-permanent zero rate policy due to the economic situation in the United States. 

Forward Guidance
First, let’s review the move from QE to forward guidance. In September I wrote about tapering and the shift from QE toward forward guidance. My ...


As this site is now reader-supported via Patreon, the remainder of this article is only available to subscribers at a specific patronage level. Articles at patronage levels BRONZE, SILVER, and GOLD are denoted by the categories in blue capital letters above the post. Posts categorized DAILY are available to both SILVER and GOLD patrons.

Click here to join. Your readership is greatly appreciated!

Registered users can log in by entering details here or below.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More