FAST FIVE: FOMC Signals Rates Unchanged Through At Least 2023 Despite GDP Forecast Upgrade; Kaplan, Kashkari Dissent

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Source: Bloomberg Real yields are notably lower.

Source: Bloomberg On the macro side, surprises have been more to the downside since the last Fed meeting.

Source: Bloomberg Notably, the market's expectations for rates has shifted notably more hawkish in the last few weeks since the FOMC statement.

As we detailed earlier, while growth and unemployment forecasts will likely be nudged up and down respectively, the focus will be on the central bank's forecasts for rates in 2023 (released for the first time) and on inflation to see if it still sees inflation running below target over its forecast horizon; if it does, the new policy framework implies it will be longer before the Fed begins thinking about lifting rates.

In addition, over coming months the Federal Reserve will increase its holdings of Treasury securities and agency mortgage-backed securities at least at the current pace to sustain smooth market functioning and help foster accommodative financial conditions, thereby supporting the flow of credit to households and businesses.

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