Financial Times
by James Politi in Washington and Colby Smith in New York
July 27, 2020
Excerpt:
The surge in US coronavirus cases is pushing the Federal Reserve closer to a delicate decision on the best way to deliver more monetary support to the US economy, but the central bank is unlikely to move imminently. Policymakers will gather for a meeting of the Federal Open Market Committee on Tuesday and Wednesday that will be dominated by the threat to recovery posed by the spread of Covid-19, including in such economically vital states as California, Texas and Florida.
Policymakers will gather for a meeting of the Federal Open Market Committee on Tuesday and Wednesday that will be dominated by the threat to recovery posed by the spread of Covid-19, including in such economically vital states as California, Texas and Florida.
…
With financial market conditions remaining relatively strong, the Fed has signalled it is leaning against any announcement this week. This would give it more time get a firmer grasp on the data, and reach an internal consensus on its next move. Many Fed watchers are betting that a shift will not happen until at least the September meeting of the FOMC. “One of the reasons they are not yet ready to pull the trigger is they need more space to be able to figure out what they’re aiming at,” said Randall Kroszner, a former Fed governor and economist at the University of Chicago. “In particular, there’s an enormous amount of uncertainty about the virus, about the responses to the virus, whether that’s on the fiscal side or on the health side, and uncertainty about the economic consequences.”
“One of the reasons they are not yet ready to pull the trigger is they need more space to be able to figure out what they’re aiming at,” said Randall Kroszner, a former Fed governor and economist at the University of Chicago. “In particular, there’s an enormous amount of uncertainty about the virus, about the responses to the virus, whether that’s on the fiscal side or on the health side, and uncertainty about the economic consequences.”
…
Read more at: https://www.ft.com/content/a5491d71-a6ff-4b76-ac38-bb3a45364d30